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Multifacility-Type Capacity Expansion Planning: Algorithms and Complexities

Author

Listed:
  • Sang-Bum Lee

    (Seoul City University, Seoul, Korea)

  • Hanan Luss

    (AT&T Bell Laboratories, Holmdel, New Jersey)

Abstract

We examine several variations of a capacity expansion model with multiple facility types, and with the flexibility for converting capacity from one facility type to another. Applications can be found in communication networks and production facilities. The models include costs of expansions, conversions, excess capacities and capacity shortages, and assume cost functions that are either linear or concave. We find the optimal solution by exploiting properties of extreme flows in networks and employing a dynamic programming algorithm. Specializing our results permits us to obtain different model variations by imposing certain conditions on the cost functions, and to derive the computational complexities for these variations. Typically, applications require extensive sensitivity studies that may use up substantial computer resources. Our analysis unifies previous work, extends the results, and provides intuition concerning the difficulties involved in applying the models.

Suggested Citation

  • Sang-Bum Lee & Hanan Luss, 1987. "Multifacility-Type Capacity Expansion Planning: Algorithms and Complexities," Operations Research, INFORMS, vol. 35(2), pages 249-253, April.
    • Handle: RePEc:inm:oropre:v:35:y:1987:i:2:p:249-253
    DOI: 10.1287/opre.35.2.249
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    Citations

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    Cited by:

    1. Maria Albareda-Sambola & Antonio Alonso-Ayuso & Laureano Escudero & Elena Fernández & Yolanda Hinojosa & Celeste Pizarro-Romero, 2010. "A computational comparison of several formulations for the multi-period incremental service facility location problem," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 18(1), pages 62-80, July.
    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. Martínez-Costa, Carme & Mas-Machuca, Marta & Benedito, Ernest & Corominas, Albert, 2014. "A review of mathematical programming models for strategic capacity planning in manufacturing," International Journal of Production Economics, Elsevier, vol. 153(C), pages 66-85.
    4. Correia, Isabel & Melo, Teresa, 2016. "A computational comparison of formulations for a multi-period facility location problem with modular capacity adjustments and flexible demand fulfillment," Technical Reports on Logistics of the Saarland Business School 11, Saarland University of Applied Sciences (htw saar), Saarland Business School.
    5. Linos F. Frantzeskakis & Hanan Luss, 1999. "The network redesign problem for access telecommunications networks," Naval Research Logistics (NRL), John Wiley & Sons, vol. 46(5), pages 487-506, August.
    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. Alper Atamtürk & Dorit S. Hochbaum, 2001. "Capacity Acquisition, Subcontracting, and Lot Sizing," Management Science, INFORMS, vol. 47(8), pages 1081-1100, August.
    8. Ariane Kayser & Florian Sahling, 2023. "Relocatable modular capacities in risk aware strategic supply network planning under demand uncertainty," Schmalenbach Journal of Business Research, Springer, vol. 75(1), pages 1-35, March.
    9. Vernon Ning Hsu, 2002. "Dynamic Capacity Expansion Problem with Deferred Expansion and Age-Dependent Shortage Cost," Manufacturing & Service Operations Management, INFORMS, vol. 4(1), pages 44-54, June.

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