Author : Nattapol Pornsalnuwat
Release : 2002
Genre :
Kind : eBook
Book Rating : /5 ( reviews)
Book Synopsis Capacity Expansion with Technological Change by : Nattapol Pornsalnuwat
Download or read book Capacity Expansion with Technological Change written by Nattapol Pornsalnuwat. This book was released on 2002. Available in PDF, EPUB and Kindle. Book excerpt: Technological change is an important factor in capacity expansion problem. Its effect includes decreasing the unit cost of a product that provides capacity, thus it reduces the present worth cost of the expanded capacity. We study its impact by formulating dynamic programming models for several capacity expansion cases according to the types of demand growth, the existence of lead-time for construction, and incorporation of technological change. The objective function for the optimal policy is the total cost of expansion over an infinite time horizon. In the case without lead-time for construction, the calculation results show that technological change encourages the optimal policy to expand capacity at shorter time intervals between each successive expansion. In the case with lead-time for construction, the results show that the optimal policy for capacity expansion is to expand at shorter time intervals between each successive expansion with smaller expansion size. However, the optimal timing parameter is more sensitive to the penalty factor for capacity shortage than the technological parameters. On the other hand, the optimal sizing parameter is more sensitive to the technological parameters than the shortage penalty.
