Optimal investment in product-flexible manufacturing capacity
Management Science
Manufacturing flexibility: a strategic perspective
Management Science
Competition and investment in flexible technologies
Management Science
Capacity acquisition and disposal with discrete facility sizes
Management Science
Principles on the benefits of manufacturing process flexibility
Management Science
Quick response in manufacturer-retailer channels
Management Science - Special issue on frontier research in manufacturing and logistics
Investment Strategies for Flexible Resources
Management Science
Optimizing Inventory Replenishment of Retail Fashion Products
Manufacturing & Service Operations Management
Process Flexibility in Supply Chains
Management Science
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
The Strategic Perils of Delayed Differentiation
Management Science
Manufacturing & Service Operations Management
Drivers of Finished-Goods Inventory in the U.S. Automobile Industry
Management Science
The Relational Advantages of Intermediation
Management Science
On the Value of Input Efficiency, Capacity Efficiency, and the Flexibility to Rebalance Them
Manufacturing & Service Operations Management
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We analyze volume flexibility---the ability to produce above/below the installed capacity for a product---under endogenous pricing in a two-product setting. We discover that the value of volume flexibility is a function of demand correlation between products, an outcome that cannot be explained by classical risk-pooling arguments. Furthermore, whereas the value of product flexibility always decreases in demand correlation, we show that the value of volume flexibility can increase or decrease in demand correlation depending on whether the products are strategic complements or substitutes. We further find that volume flexibility better combats aggregate demand uncertainty for the two products, whereas product flexibility is better at mitigating individual demand uncertainty for each product. Our results thus underscore the necessity of analyzing volume flexibility with more than one product and emphasize the contrast with product flexibility. Furthermore, we highlight the possible pitfalls of combining flexibilities: we show that although adding volume flexibility to product flexibility never hurts performance, adding product flexibility to volume flexibility is not always beneficial, even when such an addition is costless.