Optimal Capacity Expansion Strategies under Demand Uncertainty

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...

Dynamic Planning the Expansion of Electric Energy Distribution Systems Considering Distributed Generation Resources in the Presence of Power Demand Uncertainty

In this paper, a new strategy based on a dynamic (time-based) model is proposed for expansion planning of electrical energy distribution systems, taking into account distributed generation resources and advantage of the techno-economic approach. In addition to optimal placement and capacity, the proposed model is able to determine the timing of installation / reinforcement of expansion options....

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

Optimal Investment Strategies for Product-Flexible and Dedicated Manufacturing Systems under Demand Uncertainty

This paper studies the optimal investment strategy of a firm having the managerial freedom to acquire both flexible or dedicated production capacity. Flexible Capacity is more expensive but allows the firm to switch costlessly between products and handle changes in relative volumes among products in a given product mix. Dedicated capacities restrict to manufacture one specific product but for l...

Partially Adaptive Stochastic Optimization for Electric Power Generation Expansion Planning

Electric Power Generation Expansion Planning (GEP) is the problem of determining an optimal construction and generation plan of both new and existing electric power plants to meet future electricity demand. We consider a stochastic optimization approach for this capacity expansion problem under demand and fuel price uncertainty. In a two-stage stochastic optimization model for GEP, the capacity...