Abstract:We study logistical investment flexibility provided by modular processing technologies for mitigating risk. Specifically, we propose a multi-stage stochastic programming formulation that determines optimal capacity expansion plans that mitigate demand uncertainty. The formulation accounts for multi-product dependencies between small/large units and for trade-offs between expected profit and risk. The formulation uses a cumulative risk measure to avoid timeconsistency issues of traditional, per-stage risk-minim… Show more
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