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Capacity Expansion with Two Producing Regions and Concave Costs

Author

Listed:
  • C. O. Fong

    (The University of Rochester)

  • M. R. Rao

    (The University of Rochester)

Abstract

A deterministic capacity expansion and shipment planning problem is considered for a single commodity that can be produced in two regions. Demand in each region is nondecreasing over a finite time horizon. Demand in a region in a time period must be satisfied, either by the current production capacity there or by a shipment from the other region. Capacity expansion and shipment costs are assumed to be concave and no inventory of stock is allowed. The problem is to find a schedule of capacity expansion in each region and a schedule of shipment between the two regions, such that the total cost over the time horizon is minimized. To solve this problem a dynamic programming algorithm is devised that is more efficient than known conventional procedures.

Suggested Citation

  • C. O. Fong & M. R. Rao, 1975. "Capacity Expansion with Two Producing Regions and Concave Costs," Management Science, INFORMS, vol. 22(3), pages 331-339, November.
    • Handle: RePEc:inm:ormnsc:v:22:y:1975:i:3:p:331-339
    DOI: 10.1287/mnsc.22.3.331
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    Cited by:

    1. Mohammad Ebrahim Arbabian & Shi Chen & Kamran Moinzadeh, 2021. "Capacity Expansions with Bundled Supplies of Attributes: An Application to Server Procurement in Cloud Computing," Manufacturing & Service Operations Management, INFORMS, vol. 23(1), pages 191-209, 1-2.

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