Manufacturing Investment Research Articles

Recycle System Design for End-of-Life Electronics in Developing Countries

This paper examines recycling of end-of-life products in developing countries to determine the most reasonable collection policy in order to increase profits. The process of self-recycling by original manufacturers is examined using simulations. The simulations were based on three different investment percentages for collection versus refurbishment/remanufacture for end-of-life products. Results offered here can help decision makers understand trade-offs they face as they decide how to best process returned products (refurbish, remanufacture, or recycle). Simulations of the various collection policies for end-of-life products suggest that original manufacturers in developing countries experience better profit results from collection policies that favour developing refurbishment and remanufacturing capabilities over collection. Furthermore, eco-design bolsters profitability and efficiency of self-recycling systems under all conditions, whereas supplier partnership for environmental design only improves outcomes when the original manufacturer invests in its refurbishment and remanufacturing capabilities.

Understanding Innovative Investment: Intangible Investment and R&D Expenditures of Korean Firms

This study examines firms’ propensity for innovative investment, such as intangible investment and R&D expenditures, by using rich panel data of Korean firms from the Survey of Business Activities. This topic has not been documented as much as the contribution of innovative investment to economic performance. The dynamic random effects probit estimations show not only that firms’ propensity for intangible investment is persistent and dependent on firms’ characteristics, but also that the dependence on firms’ factors varies across sectors. On the one hand, estimations show that the propensity for intangible investment is complementary with internal R&D expenditures, except among ICT manufacturing firms. Among intellectual property rights, patents (trademarks) are positively associated with intangible investment in the non-ICT manufacturing (service) sector. In general, firms’ affiliation with a parent company, or their status as listing companies, affects firms’ propensity for intangible investment positively. On the other hand, firms’ propensity for R&D expenditures exhibits stronger persistence than that for intangible investment. Non-ICT manufacturing firms exhibit the strongest persistence of R&D expenditures. While intangible investment is associated positively with propensity for R&D, patent rights are the only intellectual property rights showing positive connection to R&D expenditures. This effect is clearest among ICT manufacturing firms. In conclusion, this study contributes toward a better understanding of Korean firms’ innovative investment by highlighting the role of firm-level characteristics, but also by demonstrating the heterogeneity of factors across sectors.

Single and multi-objective optimization of a TEG system for optimum power, cost and second law efficiency using genetic algorithm

Using thermoelectric power generation system is one of the clean devices for converting heat to electrical power which is applied to recover waste energy. In this study, paying special attention to the investment and second law efficiency, a TEG system equipped with hot and cold heat-exchangers is considered and optimized for an automobile exhaust. First, the P-N couples is discretized and divided to a specified number of elements. By applying the governing equations to each element and considering the condition of the flow regime of the heat-exchangers, an enhanced numerical algorithm is developed to analyze the system and calculate the objective functions including power output, second law efficiency, investment and a compound function which is a sum of power, second law efficiency and the investment. Length of the legs, number of the P-N couples, hydraulic diameter of the heat exchangers and the hot fluid mass flow rate are considered as decision variables. Single and multi-objective optimization are provided for co-flow and counter-flow system using genetic algorithm in MATLAB software. The optimal values of the decision variables are reported and evaluated; as a result, the efficiency of 6.56% with the power of 118.72 W can be achieved using multi-objective optimization method. In addition, the Pareto sets of optimal solutions are provided and the optimal design points are suggested for the systems. It is noticeable that, the manufacturing investment of 1.94 $/W is obtained at suggested design point for counter-flow system. It is also concluded that 37.31% decreasing in the investment and 44.81% enhancement in the second law efficiency can be achieved by reducing the power output by 9.58%. The influence of effective operating parameters on the optimal power output and second law efficiency are reported and analyzed. Considering power as objective function, the optimal length of the P-N legs are reduced by increasing the mass flow rate of the cold fluid, however other optimal decision variables are increased. Besides, increasing the mass flow rate of the cold flow to more than 0.3Kgs can enhance the performance, significantly.

A physical simulation technique for cleaner and more sustainable research in additive manufacturing

Additive manufacturing (AM) introduces a new domain for zero waste and cleaner production. Research for verification of materials in AM and effects of the process on the material behavior, however, demands a significant amount of materials, energy, and man-hours. The design of suitable physical simulation techniques that can duplicate complex AM thermal cycles without performing AM is therefore crucial for cleaner and more sustainable AM research. This paper aims at introducing a novel technique to reproduce AM thermal cycles in a controlled way on a small sample, thereby supporting sustainable alloy verification and cleaner research. In this technique, a stationary arc is applied to a disc-shaped sample mounted on a water-cooled chamber, where the arc and water provide rapid heating and cooling, respectively. In the present study, a super duplex stainless steel (SDSS) was used as the experimental alloy to simulate the evolution of microstructure and properties during wire-arc additive manufacturing. The experiment was performed using the stationary arc with the holding time of 5 s, applied 1, 5, or 15 times. The total processing time was only 450 s (7.5 min) for the 15 a.m. thermal cycles experiment. The SDSS showed a progressive increase in the austenite fraction at 600–1200 °C and the formation of detrimental sigma phase at 700–1000 °C, but a reduction of austenite fraction above 1300 °C. The results were in good agreement with the literature, verifying the applicability of the physical simulation technique for AM research. Calculations showed that using arc heat treatment as the initial step is 6–20 times more efficient in different respects (materials, energy, and man-hours) compared to wire arc additive manufacturing. Therefore, this methodology can be implemented to gain an understanding of materials in AM applications thereby eliminating the need for investments in additive manufacturing of a specific component.

International investments and businesses as enablers of globalization of local risks: A case for risk communication and climate fragility reduction

The phenomenon of regional and global integration has resulted in the natural hazards and climate change impacts in one country affecting people and countries far away. This phenomenon of globalization of local risks has long been known but has not received much attention. With greater regional integration and greater impacts of climate change, these considerations are more important today and in the future. This paper presents results from a regional survey conducted on globalization of local risks through investments in the vulnerable regions of Asia. The study indicated that countries that have been successful in attracting global investments in manufacturing and service industries are highly vulnerable to natural hazard risks raising an important issue of globalization of local risks. The paper reviews the current understanding on the globalization of local risks and presents the statistically analysed survey findings. The paper also presents a climate fragility risk index developed using multiple indicators that helps to identify countries predisposition to the globalization of local risks. The paper concludes by stating that the risk communication plays an important role in mitigating the globalization of local risks.

Systematic manufacturability evaluation using dimensionless metrics and singular value decomposition: a case study for additive manufacturing

Additive manufacturing has been presented as a novel and competitive method to achieve unprecedented part shapes and material complexities. Though this holds true in niche markets, the economic viability of additive manufacturing for large-scale industrial production is still in question. Companies often struggle to justify their investment in additive manufacturing due to challenges in the integration of such technologies into mainstream production. First, most additive technologies exhibit a relatively low production rate when compared with traditional production processes. Second, there is a lack of robust design for additive manufacturing methods and tools that enable the leveraging of the attendant unique capabilities, including the ability to form organic part geometries and automated part consolidations. Third, there is a dearth of systematic part screening methods to evaluate manufacturability in additive manufacturing. To tackle the challenge of manufacturability evaluation, the present work proposes a novel approach derived from latent semantic analysis and dimensional analysis to evaluate parts and their production for a variety of selected metrics. The selected metrics serve as descriptors of design features and manufacturing functions, which are developed using functional modeling and dimensional analysis theory. Singular-value decomposition and Euclidean distance measurement techniques are used to determine the relative manufacturability for a set of parts for a specified manufacturing process technology. The utility of the method is demonstrated for laser powder bed fusion technology. While demonstrated for additive manufacturing here, the developed approach can be expanded for any given set of manufacturing processes. Expansion of this systemic manufacturability analysis method can support part design decision-making, process selection, and design and manufacturing optimization.

An econometric analysis of the regional industrial specialization: The Russian manufacturing industry case study

Subject. The article reviews the manufacturing industry in Russian regions, calculates the indicators of regional industrial specialization needed for development of econometric models of spatial panel data. Objectives. The purpose is to create a methodology for analyzing the regional industrial specialization based on econometric tools; to test it, using the case of the manufacturing industry, for determining the type of externalities in the Russian Federation. Methods. To build econometric models, we use methods of least squares and maximum likelihood. We apply localization ratios to assess regional industrial specialization in terms of the volume of employment, revenue and investment in manufacturing, workforce productivity, etc. Results. The findings show the clustering of regions by the level of productivity. The localization of manufacturing industry in regions in terms of localization of employment and localization of productivity is negatively related to productivity in the region. This can be explained by the transition of regional economies to the post-industrial mode, where the service sector becomes more important, and by possible over-industrialization and specialization of certain regions in the context of the need to develop related sectors and to build links between them. The presence of direct negative MAR externalities may indicate a need for further research in positive Porter and Jacobs externalities for Russian regions manufacturing industry. Conclusions. The developed methodology enables to identify and analyze relationships between regional industrial specialization and regional indicators; to specify the type of externalities and determine the existence of indirect and direct effects of industry localization.

Aggregate and heterogeneous sectoral growth effects of foreign direct investment in Egypt

AbstractThis paper investigates the sectoral impacts of foreign direct investment (FDI) on growth in Egypt between 1990 and 2007 based on a unique data set. It highlights the aggregation bias inherent in many empirical studies that focus solely on the economy‐wide effects of foreign investment. Aggregate inflows of FDI are shown to be detrimental to the country’s economic growth performance, possibly as a result of the “crowding‐out” of more productive domestic investment. Some positive sector‐specific effects, however, are found for investment in manufacturing and petroleum, which also has beneficial spillovers into other sectors. FDI in the finance and retail and telecommunications and information technology sectors are found to generate significantly negative growth effects, while those in services and tourism are negative but generally insignificant. These findings suggest that “market‐seeking” FDI in certain sectors has conspicuous “crowding‐out” effects, possibly owing to insufficient domestic absorptive capacity. The results of this study further demonstrate the importance of potential sectoral heterogeneity of own sector and inter‐sectoral economic growth effects of FDI. It therefore highlights the critical need for policymakers to take a more disaggregated sectoral‐level evaluation of the benefits of foreign investment, particularly in developing economies such as Egypt.

Capacity Sharing and Capacity Investment of Environment-Friendly Manufacturing: Strategy Selection and Performance Analysis.

Many small manufacturing factories suffer insufficient environment-friendly capacity after eliminating the outdated and environmental-harmful production capacity according to stringent environmental rules and regulations. This paper analyzes two strategies that the manufacturer with limited environment-friendly capacity may take to tackle this problem, i.e., investing in building environment-friendly capacities and collaborating with the manufacturer with sufficient environment-friendly capacity in capacity sharing. In a supply chain with two competing manufacturers, this paper builds game-theoretical models and investigates equilibrium solutions under three scenarios (no capacity investment or sharing, capacity investment, and capacity sharing). Then this research investigates the feasible regions of these two strategies and compares the performance of each manufacturer under each scenario. The findings show that both capacity investment and capacity sharing can effectively reduce the profit loss of the manufacturer with limited capacity, while only capacity sharing benefits both manufacturers. The feasibility of these two strategies depends on the initial capacity volume and the capacity investment cost coefficient of the manufacturer with limited capacity. Moreover, the preference of the manufacturer with limited capacity for each strategy depends on the capacity investment cost coefficient. When the capacity investment cost coefficient is relatively high, the win-win situation exists for supply chain members. Furthermore, with the use of chaos theory, the paper shows how to adjust the capacity investment in each period to keep the system stable.

PHARMACEUTICAL INDUSTRY DEVELOPMENT: KEY POLICY INSTRUMENTS IN CHINA

The article provides an overview of programs, plans, tools of scientific and technological, innovation and industrial policy aimed at creating and producing new drugs in China; it is substantiated that the Chinese government uses an integrated approach in the implementation of mechanisms to protect and strengthen the pharmaceutical industry. It is demonstrated that the Chinese government provides business support in the form of subsidies, tax incentives, the creation of special zones for the development of high-tech industries, and helps to attract foreign direct investment in contract manufacturing and research and development, accompanied by technology transfer; through the public procurement system, a program for the development of endogenous innovations is implemented through the provision of price preferences, and advanced foreign technologies are involved. State support contributed to an increase in the level of localization of production and an increase in the number of jobs, an increase in the added value of production and the competitiveness of the pharmaceutical industry, the formation of scientific and technical competencies and the development of technologies, the creation of objects of intellectual property rights. The Chinese model of investment and innovative development, relying on the use of external technological, production, human resources, has made it possible to form a high-tech pharmaceutical sector capable of producing endogenous innovations. Given the objectives of the policy documents, Chinese enterprises are encouraged to invest in other countries in the interests of the development of Chinese pharmaceuticals.

Granular fuzzy pay-off method for real option valuation

In the last decade, the fuzzy pay-off method has emerged as a widely used alternative approach for real option valuation thanks to its simplicity that makes it easily approachable by practitioners from various application domains. In this study, a new direction for real option valuation is pursued by proposing a granular fuzzy pay-off method. We motivate the proposal by discussing how the extension of the original approach with granular representation can further improve the fuzzy pay-off method. The design of the granular fuzzy pay-off method is founded on the principle of justifiable granularity, which in turn relies on numeric data to build information granules that are semantically sound and experimentally justified. To illustrate the method, a case study in R&D investment in manufacturing is worked out. The extended granular fuzzy pay-off method improves performance and usability in cases with uncertainty.

Comparison of Cooperation Modes in a Two-Period Closed-Loop Supply Chain System considering Green Manufacturing

In order to improve the efficiency of collection and green manufacturing level in a closed-loop supply chain (CLSC) system, the manufacturer invests green manufacturing efforts in product design and production process and intends to cooperate with other CLSC members to achieve excellent performance. In a two-period CLSC system consisting of one manufacturer, one retailer, and one third-service provider, a game-theoretical approach is adopted to compare the optimal decisions and profits of the three green manufacturing cooperation modes, namely, the manufacturer cooperates with the retailer and third-service provider, respectively, and the noncooperation mode is a benchmark. Moreover, the impact of different cooperation modes on CLSC decision-making is analyzed as well. The results indicate that the influence of difference among cooperation modes on CLSC decision is significant, and cooperation is always better than noncooperation. From the perspective of consumers as well as recycling and profit, although the collection rate of used products is not the highest when the manufacturer cooperates with the retailer, the price of product is the lowest and the green property of product is the most obvious; thus, this is regarded as the suitable cooperation mode after a comprehensive analysis. Besides, a coordination mechanism is designed to solve the inefficiency caused by double marginalization. Finally, numerical examples are presented to intuitively observe the relationships between decisions and profits and the impact of different parameters on them in the three modes, and some management inspirations are proposed ultimately.

Firms' preferences for retailing formats considering one manufacturer's emission reduction investment

Nowadays, many countries and governments implement the cap-and-trade regulation to curb carbon emissions. This study aims to explore how the regulation affects an e-tailer's choice of retailing formats between marketplace and reseller as well as its partner's response by considering a supply chain composed of an e-tailer and a manufacturer. We also take the manufacturer's investment strategy into account and then develop four models to examine the two members' preferences for retailing formats. First, our results demonstrate that if a product's emissions in the retail process are medium (low) or the platform fee rate is relatively low (high), the e-tailer and the manufacturer both prefer marketplace (reseller) mode. Second, the e-tailer prefers to offer reseller mode for one manufacturer with a strong ability of emission reduction and offer marketplace mode otherwise; but the manufacturer's preference is opposed to the e-tailer's. Third, the manufacturer always benefits from her investment, regardless of in marketplace or reseller modes; the e-tailer's attitude towards the manufacturer's investment varies with retailing formats. Specifically, the e-tailer under reseller mode always prefers the manufacturer to invest; but under marketplace mode, he prefers the manufacturer to invest only when the latter's ability of emission reduction is weak.

Determinants of private investment growrh in manufacturing sectors: The Case of Akaki Kaliti Sub City, Addis Ababa

This study was conducted to identify the determinants of Private Investment Growth in manufacturing sectors in case of Akaki Kaliti Sub-city, Addis Ababa. The study employed an explanatory research design with quantitative and qualitative research approaches. Furthermore, the data was collected with a cross-sectional period. The required data were collected from 168 selected private manufacturing investments by adopting a systematic sampling technique. The data collected through a questionnaire were analyzed by using Stata software version 13. The collected data was analyzed using both descriptive and inferential statistics. The findings of the quantitative data were presented in tables and figures, while the qualitative data was presented in narration. The findings of the study showed that work experience and availability of premises affect the private manufacturing sectors investment growth positively. Likewise, the availability of infrastructure facilities was important determining factors in delaying private investment growth. Shortages of materials and services such as transformers, internet facilities, and water supplies have been cited as the major obstacles which delay the investment growth in the study area. In conclusion, the main determinant of Private Investment Growth in manufacturing sectors were working experience, premises, infrastructure, location of enterprise, planning, good governance, market access, and investment incentives. Therefore, the study recommends that Addis Ababa city administration in collaboration with other stakeholders should give training to private manufacturing sectors and facilitate knowledge share program among each other. Likewise, the city administration in collaboration with trade and industry office needs to involve effectively in supporting private manufacturing sectors by offering convenient display room, selling premises, and creating market linkage with unions, cooperatives, government organizations, and non-government organizations.

Capacity investment and inventory planning for a hybrid manufacturing – remanufacturing system in the circular economy

Remanufacturing through circular economy conserves energy and materials while creating economic growth and employment. Thus, it is imperative to develop better systems that optimise the use of resources, maximise the value of the product, and minimise the total cost. Towards this, we present a two-stage stochastic linear model for a make-to-order hybrid manufacturing-remanufacturing production system by integrating capacity and inventory decisions. We consider the uncertainty in demand, core returns rate and yield to impose flexibility as both operations are considered with a collective production capacity on the same assembly line. We have considered a setting where demand for new and remanufactured products does not cannibalise each other’s demand (e.g. new parts for original equipment and remanufactured parts for independent aftermarket). Further, the capacity utilisation by core returns is considered in two ways: less capacity intensive case and more capacity intensive case. The developed model is solved for optimal inventory and capacity levels along with production quantities by maximising utilisation of resources and profit. We also present a closed-form solution by demand space partition to deduce the optimal policy of the firm. Based on our analysis, we have presented settings where remanufacturing can perfectly substitute manufacturing.

What drives aggregate investment? Evidence from German survey data

The ifo Investment Survey asks firms in the German manufacturing sector about the importance of sales, technological factors, finance, return expectations, and macroeconomic policy for their investment activity in a given year. We show that these subjective investment determinants 1) capture economically what their labels suggest, and 2) have strong explanatory power for aggregate manufacturing investment growth fluctuations. In a second step, we use these determinants to identify aggregate demand and aggregate technology shocks and argue that the bulk of the variance of both aggregate manufacturing investment and output growth fluctuations (as much as approximately two thirds in both cases) is explained by aggregate demand shocks. Consistent with neoclassical views, however, technological factors are the most important investment determinant on average.

Optimal Innovation Investment: The Role of Subsidy Schemes and Supply Chain Channel Power Structure

We investigate the impact of government subsidy schemes and channel power structure on the level of innovation in a two-tier supply chain. Our results indicate that consumer subsidies are more effective than producer subsidies in promoting innovation investment for a given channel power structure. Regardless of the power structure, supply chain members, consumers and society benefit more from consumer subsidies. If government subsidies are absent, innovation investment is higher when neither member of the supply chain dominates, and consumer surplus and social welfare are also higher in the Nash game. Under the consumer subsidy scheme, although government expenditures are higher in the manufacturer-led game, innovation investment is the same under different power structures, and consumer surplus and social welfare are also, in turn, the same. Under the producer subsidy scheme, the manufacturer invests more in innovation, and government expenditure is also higher when the retailer dominates the supply chain. Under producer subsidies, consumers and society benefit from the presence of powerful retailers when the investment cost is lower, and consumer surplus and social welfare have an inverted U-shaped relationship with the retailer’s power otherwise.

Laying the Foundations for Future Growth Acceleration?

President Joko Widodo was inaugurated for his second term with a vision to make Indonesia a $7 trillion economy by 2045, seven times its current value. This Survey examines recent developments in Indonesia, with a focus on the challenges of laying the foundations for Jokowi’s vision. It discusses issues surrounding the new cabinet composition in relation to economic targets and asks whether the cabinet can push through the reforms needed to achieve the required rate of economic growth. While the annual growth rate has steadied at 5%, we argue that this rate will be insufficient for realising the president’s 2045 vision. A higher growth rate is needed in the next five years but will be difficult to achieve given the external and domestic challenges. The government’s plans to push for productivity improvements and promote investment in value-added manufacturing are laudable. To realise these plans, the government should invest in creating a healthy and competitive investment climate. Policies to promote such a climate should be implemented with the support of capable institutions to expedite the process.

The public-private investment nexus in India: Evidence from a policy simulation approach

This study investigates the influence of public investment on private investment in India, at both the aggregate and Sectoral levels and under two different modes of deficit financing - monetisation and commercial borrowing - in an eclectic macroeconometric modelling framework. Using Generalised Method of Moments (GMM), the two simulation exercises conducted in the study highlight the crowdingin effect of public investment on aggregate private investment, irrespective of the mode of financing. The favourable accelerator effect and the complementary effect are found to outweigh the deleterious interest effect in both simulation exercises. At the Sectoral level, public investment is found to most strongly and positively affect private investment in manufacturing, followed by agriculture, the service sector, and finally infrastructure. The impact of public investment on the other sectors included in the model accords well with theoretical expectations.

An Economy-Wide Assessment of Artificial Intelligence Investment on Manufacturing: A Case Study of Taiwan’s Semiconductor and ICT Industries

With the rapid development of digital computing capabilities, the emergence of Internet of Things (IoT), cloud and big data analytics, Artificial Intelligence (AI) has become an important innovative tool for digital transformation and technological upgrading of global manufacturing. In this paper, using dynamic Computable General Equilibrium (CGE) model of MONASH-type and Taiwan’s input-output tables to capture the supply-chain interdependence and resource constraints, we present the economy-wide assessment of government policies and private companies’ investment in smart manufacturing, as well as the impact on the output and employment of Taiwan semiconductor and ICT industry. Simulation results show that, under increasing AI investment, semiconductor output will be 10.34% higher than the baseline, and employment demand will be 24.61% lower than the baseline in 2025. The result is similar on the ICT industry as well. The development of smart manufacturing is an adaptation strategy for private enterprises to cope with declining birthrate, labor shortage, and improving production yield and efficiency. At the same time, the unemployment and the uneven income distribution may be the side effect while developing the AI on manufacturing. It is suggested that in addition to focusing on AI talent cultivation and the establishment of the infrastructures, the government may also adopt fiscal and tax policies to improve the income distribution and strengthen the labor transfer.