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The capacity investment decision for make-to-order production systems with demand rate control

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  • Bertrand, J. Will M.
  • van Ooijen, Henny P.G.
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    Abstract

    In this paper we study the capacity investment decision for make-to-order manufacturing firms that utilize a fixed capacity, operate in a stochastic, stationary market, and can influence their demand rate by increasing or decreasing their sales effort. We consider manufacturing situations that differ in sales contribution, in market elasticity to sales effort, work-in-process costs, and demand sensitivity to lead time.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 137 (2012)
    Issue (Month): 2 ()
    Pages: 272-283

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    Handle: RePEc:eee:proeco:v:137:y:2012:i:2:p:272-283

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    Web page: http://www.elsevier.com/locate/ijpe

    Related research

    Keywords: Capacity investment; Make-to-order; Demand rate control; Lead time sensitivity;

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    1. Frederick S. Hillier, 1963. "Economic Models for Industrial Waiting Line Problems," Management Science, INFORMS, vol. 10(1), pages 119-130, October.
    2. Sanjeev Dewan & Haim Mendelson, 1990. "User Delay Costs and Internal Pricing for a Service Facility," Management Science, INFORMS, vol. 36(12), pages 1502-1517, December.
    3. Tijms, H. C. & Duyn Schouten, F. A. van der, 1978. "Inventory control with two switch-over levels for a class of M/G/1 queueing systems with variable arrival and service rate," Stochastic Processes and their Applications, Elsevier, vol. 6(2), pages 213-222, January.
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