An Integrated Real Options and Fuzzy Multi-Criteria Decision Making Approach for Selecting an Advanced Manufacturing System

摘要

In this paper, an integrated real options and fuzzy multi-criteria decision making (MCDM) framework is proposed for selecting the most suitable advanced manufacturing system (AMS). Both economic evaluation criterion and strategic criteria such as quality improvement, ease of use, which are not quantitative in nature, are considered for AMS selection. The economic aspects of the AMS selection process are addressed using fuzzy real options valuation. The valuation approach modifies fuzzy discounted cash flow (DCF) methodology in a way to incorporate option premium of expansion flexibility while evaluating AMS investments. A distance-based fuzzy MCDM approach employing the concepts of ideal and anti-ideal solutions is presented for selecting an AMS by integrating the economic figure of merit with the strategic performance criteria. The decision framework developed in this paper enables us to incorporate crisp and fuzzy data into the evaluation process of AMS alternatives. Linguistic variables are used to indicate the criteria's importance weights assigned by the decision-makers. A comprehensive example is provided to illustrate the proposed decision support framework.