A Stochastic Capacity Expansion Model: Non-Modular Temporary Facilities.

Abstract

This paper considers optimal decision strategies with regard to capacity expansion in an environment where demand arrivals and departures can be characterized as independent Poisson processes. Two types of facilities are considered in the model: permanent and temporary. Permanent facilities represent the means by which demand is normally served, while temporary facilities represent the extraordinary measures taken in order to serve excess demand (prior to an expansion of permenent facilities). Examples of temporary facilities include backlogging, overloading and jobletting. This paper considers non-modular temporary facilities, the costs of which depend only on the amount of excess demand currently being served. A companion paper (17) treats the case of modular temporary facilities. For a given limit (K) on temporary facility usage, the form of the expected discounted cost functional, parameterized in the expansion size (X+1), is derived. Recursions are given for determining these functionals over all feasible values for K.

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Document Details

Document Type
Technical Report
Publication Date
Sep 27, 1976
Accession Number
ADA033428

Entities

People

  • R. Scott Shipley

Organizations

  • Stanford University

Tags

Communities of Interest

  • Materials and Manufacturing Processes

DTIC Thesaurus Topics

  • Algorithms
  • Coding
  • Coefficients
  • Computations
  • Computers
  • Costs
  • Decoding
  • Distribution Functions
  • Equations
  • Linear Systems
  • Mathematical Programming
  • Optimization
  • Probability
  • Probability Distributions
  • Random Variables
  • Random Walk
  • Time Intervals

Readers

  • Facility/Structural Engineering.
  • Operations Research
  • Statistical inference.