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| Author: | Rajagopalan, S. |
| Title: | Deterministic capacity expansion under deterioration |
| Journal: | Management Science
1992 : APR, Vol. 38:4, p. 525-539 |
| Index terms: | CAPACITY CAPACITY UTILIZATION INVESTMENT FORECASTING OPTIMIZATION |
| Language: | eng |
| Abstract: | The deterministic capacity expansion problem with deterioration is examined. The conventional model is extended by incorporating capacity deterioration effects and operating costs which are the function of two variables: the age of the facility and the extent of the utilization of its capacity. Next, the well-known horizon results are extended to this model, using a novel dual-based approach which also provides additional intuition. Finally, interesting computational results are presented that compare optimal and near-optimal forecast horizon values. The impact of capacity deterioration and convexity in variable costs on forecast horizons is also considered. |
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