Capacity expansion with lead times and autocorrelated random demand

dc.contributor.author Ryan, Sarah
dc.contributor.author Ryan, Sarah
dc.contributor.department Industrial and Manufacturing Systems Engineering
dc.date 2018-02-18T12:27:41.000
dc.date.accessioned 2020-06-30T04:47:50Z
dc.date.available 2020-06-30T04:47:50Z
dc.date.copyright Wed Jan 01 00:00:00 UTC 2003
dc.date.issued 2003-01-01
dc.description.abstract <p>The combination of uncertain demand and lead times for installing capacity creates the risk of shortage during the lead time, which may have serious consequences for a service provider. This paper analyzes a model of capacity expansion with autocorrelated random demand and a fixed lead time for adding capacity. To provide a specified level of service, a discrete time expansion timing policy uses a forecast error-adjusted minimum threshold level of excess capacity position to trigger an expansion. Under this timing policy, the expansion cost can be minimized by solving a deterministic dynamic program. We study the effects of demand characteristics and the lead time length on the capacity threshold. Autocorrelation acts similarly to randomness in hastening expansions but has a smaller impact, especially when lead times are short. However, the failure either to recognize autocorrelation or to accurately estimate its extent can cause substantial policy errors.</p>
dc.description.comments <p>This is the peer reviewed version of the following article: Ryan, S. M., “Capacity Expansion with Lead Times and Correlated Random Demand,” Naval Research Logistics, 50(2), pp. 167-183 (2003), which has been published in final form at <a href="http://dx.doi.org/10.1002/nav.10055" target="_blank">http://dx.doi.org/10.1002/nav.10055</a>. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.</p>
dc.format.mimetype application/pdf
dc.identifier archive/lib.dr.iastate.edu/imse_pubs/129/
dc.identifier.articleid 1129
dc.identifier.contextkey 10213548
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath imse_pubs/129
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/44418
dc.language.iso en
dc.source.bitstream archive/lib.dr.iastate.edu/imse_pubs/129/2003_Ryan_CapacityExpansionLead.pdf|||Fri Jan 14 19:32:52 UTC 2022
dc.source.uri 10.1002/nav.10055
dc.subject.disciplines Industrial Engineering
dc.subject.disciplines Systems Engineering
dc.title Capacity expansion with lead times and autocorrelated random demand
dc.type article
dc.type.genre article
dspace.entity.type Publication
relation.isAuthorOfPublication 22d808f1-c309-4cb1-8d3e-14c57a6b96a9
relation.isOrgUnitOfPublication 51d8b1a0-5b93-4ee8-990a-a0e04d3501b1
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