The economic valuation of improved process plant decision support technology

Area of Science:

• Industrial Engineering
• Operations Research
• Manufacturing Systems

Background:

• Manufacturing plants face challenges in justifying investments in technologies that improve decision-making processes.
• Quantifying "soft" benefits like better information, flexibility, and integration is crucial for rational investment decisions.

Purpose of the Study:

• To develop a new economic model for estimating the value of decision support investments in manufacturing.
• To provide a quantitative basis for evaluating technologies that enhance plant operations and financial forecasting.

Main Methods:

• Modeling the plant operational decision cycle (detect, analyze, forecast, choose, implement).
• Proposing a novel economic model to assess investment value based on reduced uncertainty in financial performance forecasting.

Main Results:

• The proposed model translates "soft" benefits into quantitative economic returns.
• It provides realistic financial basis for benefit estimates from decision support technologies.

Conclusions:

• The developed economic model enables rational management decisions regarding technology investments.
• It offers a method to estimate the value of improved information, flexibility, and integration in manufacturing.