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Strategic Capacity Planning

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Designing Value-Creating Supply Chain Networks

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Abstract

When should a business add production or distribution capacity to its SCN and how much? This is the main issue addressed in this chapter, which also examines the selection of appropriate technology to provide capacity. The chapter starts by clarifying the nature of strategic capacity planning decisions. It then studies the measurement of the capacity provided by a technological system. It finally shows how to formulate mathematical programming models to help solve capacity planning problems.

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Notes

  1. 1.

    A discrete planning horizon is of a set of subsequent planning periods of a predetermined length (e.g., a month or a year). The number of periods can be finite or infinite.

  2. 2.

    In what follows, we assume capacity is planned over a discrete planning horizon covering a finite number of planning periods (say years). The index t is used to identify planning periods. We also assume that capacity changes are always planned for the beginning of one of the periods in the planning horizon.

  3. 3.

    For those familiar with inventory theory, note the similarity between this method and the Wagner and Whitin (1958) algorithm developed to solve dynamic lot-sizing problems.

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Authors and Affiliations

  1. Université Laval, Quebec City, Canada

    Alain Martel

  2. KEDGE-Business School, Bordeaux, France

    Walid Klibi

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  1. Alain Martel
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  2. Walid Klibi
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Correspondence to Alain Martel .

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Martel, A., Klibi, W. (2016). Strategic Capacity Planning. In: Designing Value-Creating Supply Chain Networks. Springer, Cham. https://doi.org/10.1007/978-3-319-28146-9_8

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  • DOI: https://doi.org/10.1007/978-3-319-28146-9_8

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-28144-5

  • Online ISBN: 978-3-319-28146-9

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