Evaluating and Selecting Flexible Manufacturing Systems by Integrating Data Envelopment Analysis and Analytical Hierarchy Process Model

Because of continuous changes in the market and the today’s competitiveness world, most of manufacturing firms are competing for meeting demand, increasing quality and decreasing costs. Today, manufacturing firms are required to select a suitable flexible manufacturing system (FMS) to keep their share of the market. We propose a procedure for evaluating the flexible manufacturing systems based on a model incorporating two decision models namely “Data Envelopment Analysis (DEA)” and “Analytical Hierarchy Process (AHP)”. DEA helps us to categorize the Decision Making Units (DMUs) to only two classes of efficient and inefficient units, whereas by using an AHP, we can have a full rank of DMUs. Input and output factors considered for ranking FMSs are Capital and Operating Costs, Throughput Time, Work in Process, Labor Requirements, Required Floor Space, Product Mix Flexibility,Yield, and Volume Flexibility. We implement this approach for a Vehicle Manufacturing Company in Iran.