Capacity optimization under uncertainty: The impact of operational time lags

• Published in: European journal of operational research Vol. 262; no. 2; pp. 660 - 672
• Main Authors: Boonman, Hettie J., Siddiqui, Afzal S.
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 16.10.2017
• Subjects: Capacity optimization; Computer and Systems Sciences; data- och systemvetenskap; Investment analysis; Real options; Time lag; Investment analysis; Capacity optimization; Real options; Time lag

•Time lags are typically neglected in most real options models with capacity sizing.•The inclusion of time lags with sizing weakens standard results about hysteresis.•Time lags directly speed up the resumption decision but delay suspension.•Time lags increase capacity, which delays resumption but fa...