• Journal of the Korea Society for Simulation
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• v.23 no.4
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• pp.51-64
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• 2014

Small and medium Enterprises (SMEs), which have a manufacturing method of small quantity batch production produce goods using a general-purpose equipment and attached auxiliary tools. Many previous studies have focused on finding the effective resource allocations for improving the firms' productivity. It is very important for SMEs to keep costs low in assigning jobs to each resource, because they should meet the future uncertain demand of consumers under the limited budget. Using the concept of salvage cost, this paper proposes how to effectively allocate the tasks to main resources in the production process. The salvage cost is defined that purchasing cost minus decrease in value by workload, the method considering this is expected to reduce total purchasing costs during business period. To validate the effect of the proposed method, we proceed the real case study targeting on S company, PCB manufacturer to compare purchase amounts and its costs between the allocation proposed based salvage cost and current allocation method of current S company. As a results, In short-term (3 year) business period, salvage allocation have remarkable superior outcome to existing method, but gradually have cancelled out the effects in long-term (8 year) plans. Unlike the cycle allocation method, there exists the idle-equipments in allocation based salvage value. we additionally analyze the profits with respect to rental strategy of them during business period.