Simultaneous investment, operations, and financial planning in supply chains: A value-based optimization approach

Asset utilization is a major mid-term lever to increase shareholder value creation. Since rough-cut planning of capacity (dis-)investments is performed at the long-term level, detailed timing of adjustments remains for the mid-term level. In combination with capacity control measures, capacity adjustment timing can be used to optimize asset utilization. This paper provides a corresponding framework for value-based performance and risk optimization in supply chains covering investment, operations, and financial planning simultaneously. We illustrate the benefits of the approach using a case-oriented example, and highlight the value of using flexible capacity options and postponing of capacity-related decisions in an uncertain environment. & 2012 Elsevier B.V. All rights reserved.