Capacity Investment with Demand Learning

The Effect Of Salvage Market On Strategic Technology Choice And Capacity Investment Decision Of Firm Under Demand Uncertainty

An integrated vendor–buyer model with stochastic demand, lot-size dependent lead-time and learning in production

In this article, an imperfect vendor–buyer inventory system with stochastic demand, process quality control and learning in production is investigated. It is assumed that there are learning in production and investment for process quality improvement at the vendor’s end, and lot-size dependent lead-time at the buyer’s end. The lead-time for the first batch and those for the rest of the batches ...

Security-Based Co-Expansion Planning of Gas and Electricity Networks Considering Demand Response

Coordinated expansion planning of power plants has always attracted the attention of power industry planners to arrive at the optimal mix that assures adequacy of energy supply. Here, we model the coordinates for expansion of electricity and gas networks while considering technical constraints, in order to minimize the total cost of investment and operation of electricity and gas networks for a...

Optimal flexible capacity in newsboy problem under stochastic demand and lead-time

In this paper, we consider a newsvendor who is going to invest on dedicated or flexible capacity, our goal is to find the optimal investment policy to maximize total profit while the newsvendor faces uncertainty in lead time and demand simultaneously. As highlighted in literature, demand is stochastic, while lead time is constant. However, in reality lead time uncertainty decreases newsvendor's...

A Game of Competitive Investment: Over-capacity and Under-learning

We consider the situation where a number of firms decide their individual capacity investment levels. The total sum of these levels determines the total return, which the firms share in proportion to their contributions. Prior to their commitments, firms may spend efforts on learning a size indicator of the market. Using this model, we can explain the over-capacity phenomenon that appeared time...

Capacity Investment Under Postponement Strategies, Market Competition, and Demand Uncertainty

We provide a comprehensive analysis of capacity investment decisions in duopoly models with demand uncertainty. Firms make capacity investment, production, delivery and pricing decisions. Capacity investment decisions are always made ex-ante demand whereas price decisions always ex-post. The interplay between the timing of demand information and the decision of production and delivery endows fi...