Technology choice, product life cycles, and flexible automation

The authors develop and study a model of technology choice that formalizes the intuition given in the Hayes-Wheelwright process-product life cycle analysis. They then extend this model to include multiple products and analyze an economies-of-scope motivation for acquiring product-flexible manufacturing capacity. The present results suggest that optimal use of flexible technology can dictate underutilization of the flexibility capability of the technology at some points of the product and process life cycles. Based upon the analysis, the authors propose a reinterpretation of data collected by Jaikumar.