Optimal investment in product-flexible manufacturing capacity
Management Science
Principles on the benefits of manufacturing process flexibility
Management Science
Investment Strategies for Flexible Resources
Management Science
Single-Period Multiproduct Inventory Models with Substitution
Operations Research
Newsvendor Networks: Inventory Management and Capacity Investment with Discretionary Activities
Manufacturing & Service Operations Management
Process Flexibility in Supply Chains
Management Science
Who Benefits from Transshipment? Exogenous vs. Endogenous Wholesale Prices
Management Science
A Method for Staffing Large Call Centers Based on Stochastic Fluid Models
Manufacturing & Service Operations Management
On the Value of Mix Flexibility and Dual Sourcing in Unreliable Newsvendor Networks
Manufacturing & Service Operations Management
Resource Flexibility with Responsive Pricing
Operations Research
Strategic Technology Choice and Capacity Investment Under Demand Uncertainty
Management Science
A Staffing Algorithm for Call Centers with Skill-Based Routing
Manufacturing & Service Operations Management
Manufacturing & Service Operations Management
Process Flexibility Revisited: The Graph Expander and Its Applications
Operations Research
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We study the classical problem of capacity and flexible technology selection with a newsvendor network model of resource portfolio investment. The resources differ by their level of flexibility, where “level-k flexibility” refers to the ability to process k different product types. We present an exact set-theoretic methodology to analyze newsvendor networks with multiple products and parallel resources. This simple approach is sufficiently powerful to prove that (i) flexibility exhibits decreasing returns and (ii) the optimal portfolio will invest in at most two, adjacent levels of flexibility in symmetric systems, and to characterize (iii) the optimal flexibility configuration for asymmetric systems as well. The optimal flexibility configuration can serve as a theoretical performance benchmark for other configurations suggested in the literature. For example, although chaining is not optimal in our setting, the gap is small and the inclusion of scale economies quickly favors chaining over pairing. We also demonstrate how this methodology can be applied to other settings such as product substitution and queuing systems with parameter uncertainty.