Stepwise investment and capacity sizing under uncertainty
نویسندگان
چکیده
منابع مشابه
Uncertainty and stepwise investment
We analyze the optimal investment strategy of a firm that can complete a project either in one stage at a single freely chosen time point or in incremental steps at distinct time points. The presence of economies of scale gives rise to the following trade-off: lumpy investment has a lower total cost, but stepwise investment gives more flexibility by letting the firm choose the timing individual...
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Contrary to most of the papers in the literature of investment under uncertainty we study models that not only capture the timing, but also the size of the investment. We consider a monopoly setting as well as a duopoly setting and compare the results with the standard models in which the firms do not have the capacity choice. Our main results are the following. First, for low uncertainty value...
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ژورنال
عنوان ژورنال: OR Spectrum
سال: 2016
ISSN: 0171-6468,1436-6304
DOI: 10.1007/s00291-016-0460-0