We establish a flexible capacity strategy model with multiple market periods under demand uncertainty and investment constraints. In the model, a firm makes its capacity decision under a financial budget constraint at the beginning of the planning horizon which embraces n market periods. In each...

This paper investigates technology investment under flexible capacity strategy with demand uncertainty. Technology investment enables a firm to reduce its total production cost, while flexible capacity strategy aims to reduce a firm׳s production waste by postponing production until demand is...

This paper studies the relationship between demand uncertainty—the key source of excess capacity—and capacity utilization in the U.S. airline industry. We present a simple theoretical model that predicts that lower demand realizations are associated with higher demand volatility. This...

This paper studies the relationship between demand uncertainty—the key source of excess capacity—and capacity utilization in the US airline industry. We present a simple theoretical model that predicts that lower demand realizations are associated with higher demand volatility. This...

The existence of uncertainty influences the investment, production and pricing decision of firms. Therefore, capacity expansion models need to take into account uncertainty. This uncertainty, may arise because of errors in the specification, statistical estimation of relationships and in the...

Demand uncertainty is a key concern of electric utility planners. While the greater use of short lead time technologies provides one possible way to deal with this problem, it is not clear how they are best deployed. The approach taken in this paper is to examine a capacity mix model that...