A methodology for estimating the operating costs of production lines

The paper proposes a methodology for the cost assessment of production lines with unreliable machines and finite buffers. This methodology is based on the new concept of "Line Equipment Cost" (LEC), that is the actual operating cost of a certain machine which is used into a certain line configuration. For each machine, this kind of cost not only depends on a set of static parameters describing the statistical and structural properties of the machine, but also on its actual performance which, in turn, strictly depends on the specific line configuration where the machine is installed. If the line configuration is modified (e.g., more/less buffer space is available) the machine's performance is expected to improve/degrade so that its LEC value, which dynamically expresses the machine's actual operating cost, must be properly adjusted. Hence, in order to evaluate any production line, first the specific LEC values of the single machines in that line should be computed, then the "Total Line Cost" (TLC) can be determined by summing up those LEC values. Finally, the paper provides some numerical results in order to show the applicability of the proposed methodology which can be used not only to evaluate the actual operating cost of a specific production line (expressed by the TLC value), but also to compare different line configurations in order to drive strategic decision.