Flexibility in manufacturing operations is becoming increasingly more important to industrial firms due to e.g. increasing product demand volatility, internationalisation of markets and competition, and shorter product life cycles. Flexibility is hard to evaluate in the traditional way by discounting expected cash flow, but an accessible approach is to consider flexibility as real options and use option-pricing theory. The general purpose of this thesis is to analyse and increase the understanding of product-mix flexibility by using option pricing. Employing option pricing enables a number of flexibility related issues to be analysed. From a manufacturing point of view aspects such as the impact of capacity levels, degree of flexibility in the manufacturing process, and characteristics of product demand are analysed. From a financial point of view aspects such as the impact of correlation between product demand and the market portfolio, and the impact of mean-reverting processes are analysed. The manufacturing contexts are characterised by set-up costs, capacity constraints, and in the presence of several products.