A Simple Model for Computing the Trade-Offs between Plant Capacity and Operating Strategies |
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Authors: | G M Folie |
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Affiliation: | 1.Graduate School of Business, University of New South Wales, |
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Abstract: | A method is presented for determining the optimal capacity of a production system which encounters a strong seasonal demand for its output. A model is developed for analysing the trade-offs between plant capacity and different production strategies. The production strategies are computed by linear programming for a range of plant capacities and a given demand pattern. The annual capital costs of the plant are calculated as a function of plant capacity and the two costs are added in order to determine the plant capacity corresponding to the least cost. |
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