Optimal capacity and location of a sequence of land.lls are studied, and the interactions between both decisions are pointed out. The decision capacity has some spatial implications, because it a.ects the feasible region for the rest of land.lls, and some temporal implications, because the capacity determines the lifetime of the land.ll and hence the instant of time where next land.lls will need to be constructed. Some general mathematical properties of the solution are provided and interpreted from an economic point of view. The resulting problem turns out to be no convex and therefore it can not be solved by conventional optimization techniques. Some global optimization methods are used to solve the problem in a particular case, in order to illustrate the behavior of the solution depending on parameter values.
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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number
30.
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