Commonality strategies assemble different products from at least one common component and one other product-specific component. The distinguishing feature of commonality, i.e., the presence of dedicated components to be assembled with a common component, is shown to be mathematically...

This article studies optimal investment in flexible manufacturing capacity as a function of product prices (margins), investment costs and multivariate demand uncertainty. We consider a two-product firm that has the option to invest in product-dedicated resources and/or in a flexible resource...

We value the option of subcontracting to improve financial performance and system coordination by analyzing a competitive stochastic investment game with recourse. The manufacturer and subcontractor decide separately on their capacity investment levels. Then demand uncertainty is resolved and...

This paper reviews the literature on strategic capacity management concerned with determining the sizes, types, and timing of capacity investments and adjustments under uncertainty. Specific attention is given to recent developments to incorporate multiple decision makers, multiple capacity...

We introduce a class of models, called newsvendor networks, that allow for multiple products and multiple processing and storage points and investigate how their single-period properties extend to dynamic settings. Such models provide a parsimonious framework to study various problems of...

We consider a simple game in which strategic agents select arrival times to a service facility. Agents find congestion costly and, hence, try to arrive when the system is underutilized. Working in discrete time, we characterize pure-strategy Nash equilibria for the case of ample service...

Moving production to low-wage countries may reduce manufacturing costs, but it increases logistics costs and is subject to foreign trade barriers, among others. This paper studies a manufacturer's multimarket facility network design problem and investigates the offshoring decision from a network...

We study how rework routing together with wage and piece-rate compensation can strengthen incentives for quality. Traditionally, rework is assigned back to the agent who generates the defect (in a self-routing scheme) or to another agent dedicated to rework (in a dedicated routing scheme). In...