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Plant Capacity and Attainability: Exploration and Remedies

Author

Listed:
  • Kristiaan Kerstens

    (CNRS-LEM and IESEG School of Management)

  • Jafar Sadeghi

    (CNRS (LEM-UMR 9221) and IÉSEG School of Management)

  • Ignace Van de Woestyne

    (KU Leuven, Belgium)

Abstract

The output-oriented plant capacity notion has been around since more than two decades. It has mainly been applied empirically in the fishery and the hospital sectors. A problem known since its introduction into the literature is that it may not be attainable, in that it presupposes potentially unlimited amounts of variable inputs to determine the maximum of outputs available. This issue of the lack of attainability has never been explored. This paper fills this void both theoretically and empirically. It finds that the attainability may be problematic, and that bounds on the amounts of variable inputs may well need to be imposed.

Suggested Citation

  • Kristiaan Kerstens & Jafar Sadeghi & Ignace Van de Woestyne, 2017. "Plant Capacity and Attainability: Exploration and Remedies," Working Papers 2017-EQM-11, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:e201711
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    File URL: https://www.ieseg.fr/wp-content/uploads/2012/03/2017-EQM-11_Kerstens.pdf
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    Citations

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    Cited by:

    1. Kristiaan Kerstens & Jafar Sadeghi & Ignace Van de Woestyne, 2020. "Plant capacity notions in a non-parametric framework: a brief review and new graph or non-oriented plant capacities," Annals of Operations Research, Springer, vol. 288(2), pages 837-860, May.
    2. Cesaroni, Giovanni & Kerstens, Kristiaan & Van de Woestyne, Ignace, 2019. "Short- and long-run plant capacity notions: Definitions and comparison," European Journal of Operational Research, Elsevier, vol. 275(1), pages 387-397.
    3. Yang, Jiawei & Li, Yuanyu & Fang, Lei, 2023. "Financing capacity planning with environmental considerations: A non-parametric analysis," Omega, Elsevier, vol. 118(C).
    4. Kristiaan Kerstens & Jafar Sadeghi & Ignace Van de Woestyne & Linjia Zhang, 2022. "Malmquist productivity indices and plant capacity utilisation: new proposals and empirical application," Annals of Operations Research, Springer, vol. 315(1), pages 221-250, August.
    5. Zhuo-wan Liu & Tomas Balezentis & Yao-yao Song & Guo-liang Yang, 2019. "Estimating Capacity Utilization of Chinese State Farms," Sustainability, MDPI, vol. 11(18), pages 1-29, September.
    6. Song, Malin & Zhou, Wenzhuo & Upadhyay, Arvind & Shen, Zhiyang, 2023. "Evaluating hospital performance with plant capacity utilization and machine learning," Journal of Business Research, Elsevier, vol. 159(C).
    7. Kerstens, Kristiaan & Sadeghi, Jafar & Van de Woestyne, Ignace, 2019. "Convex and nonconvex input-oriented technical and economic capacity measures: An empirical comparison," European Journal of Operational Research, Elsevier, vol. 276(2), pages 699-709.
    8. Kerstens, Kristiaan & Shen, Zhiyang, 2021. "Using COVID-19 mortality to select among hospital plant capacity models: An exploratory empirical application to Hubei province," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    9. Fukuyama, Hirofumi & Song, Yao-yao & Ren, Xian-tong & Yang, Guo-liang, 2022. "Using a novel DEA-based model to investigate capacity utilization of Chinese firms," Omega, Elsevier, vol. 106(C).
    10. Ray, Subhash C. & Walden, John & Chen, Lei, 2021. "Economic measures of capacity utilization: A nonparametric short-run cost function analysis," European Journal of Operational Research, Elsevier, vol. 293(1), pages 375-387.

    More about this item

    Keywords

    Technology; Plant Capacity; Attainability;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

    NEP fields

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