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Author: | Balachandran, B. V. Balakrishnan, R. Sivaramakrishnan, K. |
Title: | Capacity planning with demand uncertainty |
Journal: | Engineering Economist
1997 : FALL, VOL. 43:1, p. 49-72 |
Index terms: | CAPACITY PLANNING NATURAL RESOURCES OPTIMIZATION DEMAND UNCERTAINTY |
Language: | eng |
Abstract: | In the paper it is examined how the ability to augment capacity on an as-needed basis affects capacity planning. Optimal capacity planning can be done separately for each resource if it is feasible to augment all resources on an as-needed basis. Simulations indicate that simplifying capacity planning to focus on an expected bottleneck resource dominates resource-level or product-level capacity planning, when all resources impose hard contraints and the firm's product mix problem is significant. |
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