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Simultaneous investment, operations, and financial planning in supply chains: A value-based optimization approach

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  • Hahn, G.J.
  • Kuhn, H.

Abstract

Asset utilization is a major mid-term lever to increase shareholder value creation. Since rough-cut planning of capacity (dis-)investments is performed at the long-term level, detailed timing of adjustments remains for the mid-term level. In combination with capacity control measures, capacity adjustment timing can be used to optimize asset utilization. This paper provides a corresponding framework for value-based performance and risk optimization in supply chains covering investment, operations, and financial planning simultaneously. We illustrate the benefits of the approach using a case-oriented example, and highlight the value of using flexible capacity options and postponing of capacity-related decisions in an uncertain environment.

Suggested Citation

  • Hahn, G.J. & Kuhn, H., 2012. "Simultaneous investment, operations, and financial planning in supply chains: A value-based optimization approach," International Journal of Production Economics, Elsevier, vol. 140(2), pages 559-569.
    • Handle: RePEc:eee:proeco:v:140:y:2012:i:2:p:559-569
    DOI: 10.1016/j.ijpe.2012.02.018
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    4. Lin, James T. & Chen, Tzu-Li & Chu, Hsiao-Ching, 2014. "A stochastic dynamic programming approach for multi-site capacity planning in TFT-LCD manufacturing under demand uncertainty," International Journal of Production Economics, Elsevier, vol. 148(C), pages 21-36.
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    7. Tuomikangas, Nina & Kaipia, Riikka, 2014. "A coordination framework for sales and operations planning (S&OP): Synthesis from the literature," International Journal of Production Economics, Elsevier, vol. 154(C), pages 243-262.
    8. Pereira, Daniel Filipe & Oliveira, José Fernando & Carravilla, Maria Antónia, 2022. "Merging make-to-stock/make-to-order decisions into sales and operations planning: A multi-objective approach," Omega, Elsevier, vol. 107(C).
    9. Ben Ali, M. & D’Amours, S. & Gaudreault, J. & Carle, M-A., 2018. "Configuration and evaluation of an integrated demand management process using a space-filling design and Kriging metamodeling," Operations Research Perspectives, Elsevier, vol. 5(C), pages 45-58.

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