• Published : 1994.01.31


A capacity expansion planning problem with buy-or-lease decisions is considered. Demands for capacity are deterministic and are given period-dependently at each period. Capacity additions occur by buying or leasing a capacity, and leased capacity at any period is reconverted to original source after a fixed length of periods, say, lease period. All cost functions (buying, leasing and idle costs) are assumed to be concave. And shortages of capacity and disposals are not considered. The properties of an optimal solution are characterized. This is then used in a tree search algorithm for the optimal solution and other two algorithms for a near-optimal solution are added. And these algorithms are illustrated with numerical examples.



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