Analysis of investment flexibility: Methodology and application to a sorting center

An investment file relies on an analysis of the physical consequences of its introduction. This analysis is difficult when demand is both cyclic and stochastic, when the production is partly processed on order and partly for stock and, lastly, when the organization, thus far relatively rigid, must be thoroughly revised in order to put the new equipment to good use. The procedure intended to support actual decision for the French Post Office rests on the successive use of two models of the sorting center process. The first is deterministic, based on integer programming formulation and is used in a DSS way. The second is a simulation model aimed to test the robustness of both the system design found by the first model and of a set of adaptive rules which monitors the system during simulation.