Skip to main content
padlock icon - secure page this page is secure

THE EFFECT OF TECHNOLOGICAL IMPROVEMENT ON CAPACITY EXPANSION FOR UNCERTAIN EXPONENTIAL DEMAND WITH LEAD TIMES

Buy Article:

$61.00 + tax (Refund Policy)

We formulate a model of capacity expansion that is relevant to a service provider for whom the cost of capacity shortages would be considerable but difficult to quantify exactly. Due to demand uncertainty and a lead time for adding capacity, not all shortages are avoidable. In addition, technological innovations will reduce the cost of adding capacity but may not be completely predictable. Analytical expressions for the infinite horizon expansion cost and shortages are optimized numerically. Sensitivity analyses allow us to determine the impact of technological change on the optimal timing and sizes of capacity expansions to account for economies of scale, the time value of money and penalties for insufficient capacity.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Article Media
No Metrics

Document Type: Research Article

Affiliations: 1: Department of Industrial & Operations Engineering, The University of Michigan, Ann Arbor, Michigan, USA 2: Department of Industrial & Manufacturing Systems Engineering, Iowa State University, Ames, Iowa, USA

Publication date: April 1, 2004

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more