Capacity expansion with lead times and autocorrelated random demand Ryan, Sarah Ryan, Sarah
dc.contributor.department Industrial and Manufacturing Systems Engineering 2018-02-18T12:27:41.000 2020-06-30T04:47:50Z 2020-06-30T04:47:50Z Wed Jan 01 00:00:00 UTC 2003 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="" target="_blank"></a>. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.</p>
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dc.identifier archive/
dc.identifier.articleid 1129
dc.identifier.contextkey 10213548
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath imse_pubs/129
dc.language.iso en
dc.source.bitstream archive/|||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
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