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The Multiregion Dynamic Capacity Expansion Problem, Part II

Author

Listed:
  • C. O. Fong

    (University of Malaya, Kuala Lumpur, Malaysia)

  • V. Srinivasan

    (Stanford University, Stanford, California)

Abstract

Consider the problem of determining a schedule of capacity expansions for m producing regions and a schedule of shipments from the regions to the n markets so as to meet the market demands over a T -period planning horizon at minimum discounted capacity expansion and shipment costs. The capacity expansion costs are assumed to be in the form of a fixed charge plus a cost proportional to the size of the expansion and the shipment costs are assumed to be proportional to the amounts involved. The heuristic algorithm of this paper improves on feasible solutions by the exchange of capacities between pairs of regions. The algorithm imbeds a branch and bound procedure to determine the optimal amounts for the pair-wise exchange of capacities and uses as a subroutine the corresponding algorithm for linear capacity expansion costs developed in an earlier paper. Computational results for both real and randomly generated problems show that the heuristic algorithm is computationally efficient and yields close to optimum solutions.

Suggested Citation

  • C. O. Fong & V. Srinivasan, 1981. "The Multiregion Dynamic Capacity Expansion Problem, Part II," Operations Research, INFORMS, vol. 29(4), pages 800-816, August.
    • Handle: RePEc:inm:oropre:v:29:y:1981:i:4:p:800-816
    DOI: 10.1287/opre.29.4.800
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    Citations

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    Cited by:

    1. A Dasci & G Laporte, 2005. "An analytical approach to the facility location and capacity acquisition problem under demand uncertainty," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(4), pages 397-405, April.
    2. Kimms, A, 1998. "Stability Measures for Rolling Schedules with Applications to Capacity Expansion Planning, Master Production Scheduling, and Lot Sizing," Omega, Elsevier, vol. 26(3), pages 355-366, June.
    3. Antunes, Antonio & Peeters, Dominique, 2000. "A dynamic optimization model for school network planning," Socio-Economic Planning Sciences, Elsevier, vol. 34(2), pages 101-120, June.
    4. Ahmed, Shabbir & Sahinidis, Nikolaos V., 2008. "Selection, acquisition, and allocation of manufacturing technology in a multi-period environment," European Journal of Operational Research, Elsevier, vol. 189(3), pages 807-821, September.
    5. Shabbir Ahmed & Nikolaos V. Sahinidis, 2003. "An Approximation Scheme for Stochastic Integer Programs Arising in Capacity Expansion," Operations Research, INFORMS, vol. 51(3), pages 461-471, June.
    6. Kimms, Alf, 1996. "Stability measures for rolling schedules with applications to capacity expansion planning, master production scheduling, and lot sizing," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 418, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    7. Antunes, Antonio & Peeters, Dominique, 2001. "On solving complex multi-period location models using simulated annealing," European Journal of Operational Research, Elsevier, vol. 130(1), pages 190-201, April.
    8. Eric Delmelle & Jean-Claude Thill & Dominique Peeters & Isabelle Thomas, 2014. "A multi-period capacitated school location problem with modular equipment and closest assignment considerations," Journal of Geographical Systems, Springer, vol. 16(3), pages 263-286, July.
    9. Kai Huang & Shabbir Ahmed, 2009. "The Value of Multistage Stochastic Programming in Capacity Planning Under Uncertainty," Operations Research, INFORMS, vol. 57(4), pages 893-904, August.
    10. Santos, Miguel Gueifão & Antunes, António Pais, 2015. "Long-term evolution of airport networks: Optimization model and its application to the United States," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 73(C), pages 17-46.
    11. E Aghezzaf, 2005. "Capacity planning and warehouse location in supply chains with uncertain demands," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(4), pages 453-462, April.

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