Integrated capacity and inventory management with capacity acquisition lead times

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dc.citation.epage958en_US
dc.citation.issueNumber3en_US
dc.citation.spage949en_US
dc.citation.volumeNumber196en_US
dc.contributor.authorMincsovicz, G.en_US
dc.contributor.authorTan, T.en_US
dc.contributor.authorAlp, O.en_US
dc.date.accessioned2015-07-28T11:58:20Z
dc.date.available2015-07-28T11:58:20Z
dc.date.issued2009-08-01en_US
dc.departmentDepartment of Industrial Engineeringen_US
dc.description.abstractWe model a make-to-stock production system that utilizes permanent and contingent capacity to meet non-stationary stochastic demand, where a constant lead time is associated with the acquisition of contingent capacity. We determine the structure of the optimal solution concerning both the operational decisions of integrated inventory and flexible capacity management, and the tactical decision of determining the optimal permanent capacity level. Furthermore, we show that the inventory (either before or after production), the pipeline contingent capacity, the contingent capacity to be ordered, and the permanent capacity are economic substitutes. We also show that the stochastic demand variable and the optimal contingent capacity acquisition decisions are economic complements. Finally, we perform numerical experiments to evaluate the value of utilizing contingent capacity and to study the effects of capacity acquisition lead time, providing useful managerial insights.en_US
dc.description.provenanceMade available in DSpace on 2015-07-28T11:58:20Z (GMT). No. of bitstreams: 1 10.1016-j.ejor.2008.04.016.pdf: 248442 bytes, checksum: 220db79a6e9f23a2a3da7696f74992af (MD5)en
dc.identifier.doi10.1016/j.ejor.2008.04.016en_US
dc.identifier.eissn1872-6860
dc.identifier.issn0377-2217
dc.identifier.urihttp://hdl.handle.net/11693/11682
dc.language.isoEnglishen_US
dc.publisherElsevieren_US
dc.relation.isversionofhttp://dx.doi.org/10.1016/j.ejor.2008.04.016en_US
dc.source.titleEuropean Journal of Operational Researchen_US
dc.subjectInventoryen_US
dc.subjectProductionen_US
dc.subjectCapacity Acquisition Lead Timeen_US
dc.subjectCapacity Managementen_US
dc.subjectFlexible Capacityen_US
dc.titleIntegrated capacity and inventory management with capacity acquisition lead timesen_US
dc.typeArticleen_US

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