A multiple criteria approach to aggregate industrial capacity expansion

A review of multi-factor capacity expansion models for manufacturing plants: Searching for a holistic decision aid

“…Similarly, factors like production efficiency which can inherently capture effects of worker skills and quality of labour are only considered by Reeves et al (1988) and Rajagopalan and Swaminathan (2001). Accounting policies, investment budgets and other costs like capacity holding and replacement costs are also not considered by most authors.…”

“…Work by Reeves (1988), Chakravarty (2005) and Melo et al (2005) are closest to being holistic models as they consider the maximum number of identified factors as input to their multi-factor models.…”

“…Perrone et al (2002), Chakravarty (2005) and Melo et al (2005) explicitly consider consider variable cost of production whereas four other authors consider this variable cost indirectly. Most authors consider operating cost function based on a dedicated technology barring Reeves et al (1988), Li and Tirupati (1994) and Perrone et al (2002) who include operating cost functions for both dedicated and flexible technologies. Finally, initial capacity is a factor identified as important by the analysis of Table 2.…”

“…Reeves (1988) considered expected net present value as an input whereas Hsu (2002) incorporated the capital requirement per unit of output as an input. Except for Syam (2000) and Ryan (2004), all other authors used a standard investment cost function.…”

“…A summary of this review is provided in this section. Reeves et al (1988) considers capacity expansion of an industrial firm producing multiple products in several economic regions over a multiple period horizon. They consider market demand, capital costs, labour costs and transportation costs and some products manufactured by some plants are consumed internally by other plants in the manufacturing network.…”