MODELS FOR CAPACITY ACQUISITION DECISIONS CONSIDERING OPERATIONAL COSTS

Authors
Citation
Sl. Li et J. Qiu, MODELS FOR CAPACITY ACQUISITION DECISIONS CONSIDERING OPERATIONAL COSTS, International journal of flexible manufacturing systems, 8(3), 1996, pp. 211-231
Citations number
22
Categorie Soggetti
Engineering, Manufacturing
ISSN journal
09206299
Volume
8
Issue
3
Year of publication
1996
Pages
211 - 231
Database
ISI
SICI code
0920-6299(1996)8:3<211:MFCADC>2.0.ZU;2-6
Abstract
In this article, we study a capacity acquisition problem by considerin g technology choice and operational factors in a stochastic environmen t. The motivation for our work comes from developments in modern flexi ble technologies and a problem encountered in a real industrial settin g. We study the impact of operational factors such as setup times, dem and patterns, and inventory/back order costs on the decisions of capac ity acquisition and technology choice. We consider three alternatives in capacity and technology decisions: (i) a flexible system, (ii) a de dicated system, and (iii) a combination of these two systems. For each system, we develop a model that integrates investment decisions and o perational decisions to determine an optimal amount of capacity to pur chase and the time and the types of parts to produce. The objective is to minimize the capacity acquisition cost at the beginning of the pla nning horizon and the total expected operational costs over an infinit e planning horizon. To solve the problem in this article, a solution p rocedure is proposed. Managerial insights are also derived from extens ive computational results.