ABSTRACT

This chapter describes the capacity planning problem and provide a brief review of the related literature. It discusses the development of heuristics to derive a good schedule of capacity additions to meet the forecast demand over the planning horizon. The chapter considers the technology choice and capacity expansion problem of a firm producing multiple products. It also discusses heuristics for obtaining an initial solution for Capacity Expansion Problem (CP). The chapter considers a firm producing multiple products in an environment characterized dynamic growth in market demand. It focuses on the issues of choice of technology, time phasing, and size of capacity additions to minimize the total cost of meeting the demand for all products over the planning horizon. The chapter discusses the problem of capacity expansion and investment planning in an environment characterized by multiple products and dynamic demands. It concludes with a discussion of extensions of the approach to address related issues.