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A methodology for assessing the effectiveness of Flexible Manufacturing Systems (FMSs) is presented. The methodology evaluates system capabilities in terms of the goals which must be achieved within specific manufacturing, corporate, and marketing environments. These environments constitute the context in which the system must operate. Three systems, which exhibit different types and degrees of flexibility, are analyzed. The system which best fulfills criteria within a hypothetical context is identified. Effectiveness analysis is found to be a useful tool in choosing an appropriate FMS for a manufacturing operation.