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Manufacturing capacity planning strategies

ARTICLE in CIRP ANNALS - MANUFACTURING TECHNOLOGY · DECEMBER 2009

Impact Factor: 2.54 · DOI: 10.1016/j.cirp.2009.03.034

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2 AUTHORS:

Oben Ceryan

Yoram Koren

Drexel University

University of Michigan

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Retrieved on: 10 March 2016

CIRP Annals - Manufacturing Technology 58 (2009) 403–406

Contents lists available at ScienceDirect

CIRP Annals - Manufacturing Technology

journal homepage: http://ees.elsevier.com/cirp/default.asp

Manufacturing capacity planning strategies

O. Ceryan, Y. Koren (1)*

Department of Mechanical Engineering, The University of Michigan, Ann Arbor, MI, USA

A R T I C L E I N F O

A B S T R A C T

Keywords:

Optimization

Decision Making

Reconfiguration

When planning for a new manufacturing system to produce several products over a planning horizon,

firms usually face an important decision regarding how to select the optimal quantity and portfolio of

product-dedicated and flexible capacities. Flexible systems may alleviate the unfavorable effects of

demand uncertainties, however they require higher investment costs compared to dedicated systems. In

this paper, we formulate the optimal capacity selection problem and perform numerical studies to

provide insights on how these decisions are affected by the investment costs, product revenues, demand

forecast scenarios and volatilities over the planning period.

ß 2009 CIRP.

1. Introduction

In this paper, we consider optimal capacity investment decisions for a firm that produces several products over a planning

horizon. This decision, which has long-term economic consequences, addresses two major issues: (1) how much capacity...