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Capacity Reservation for Capital-intensive Technologies

An Options Approach

  • Book
  • © 2003

Overview

Authors:
  1. Stefan Spinler

    1. Operations and Information Management Department The Wharton School, University of Pennsylvania Jon M. Huntsman Hall, Philadelphia, USA

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Part of the book series: Lecture Notes in Economics and Mathematical Systems (LNE, volume 525)

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Table of contents (5 chapters)

  1. Front Matter

    Pages I-XVI
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  2. Introduction

    • Stefan Spinler
    Pages 1-3

  3. Literature Review

    • Stefan Spinler
    Pages 5-25

  4. The Valuation of Options on Capacity

    • Stefan Spinler
    Pages 27-85

  5. Extensions to the Option Valuation Model

    • Stefan Spinler
    Pages 87-108

  6. Managerial Insights and Conclusion

    • Stefan Spinler
    Pages 109-124

  7. Back Matter

    Pages 125-144
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Keywords

About this book

Arguably the central problem in operations research and management science (OR/MS) addressed by e-Business is better coordination of supply and de­ mand, including price discovery and reduction of transactions costs of buyer­ seller interactions. In capital-intensive industries like chemicals and steel, the out-of-pocket costs of excess capacity and the opportunity costs of underuti­ lized capacity have been important factors driving the growth of exchanges for improving demand and supply coordination through e-Business platforms. Stefan Spinler addresses in his dissertation one of the most interesting aspects of this evolution for OR/MS, the parallel development of long-term and short-term markets for capacity and output, accompanied by a range of exotic options and forwards as the basic mechanisms supporting transac­ tions. This is a fascinating research topic because it builds on the powerful framework of real options, while connecting directly to key operations deci­ sions (capacity planning, staffing, maintenance, and so forth) of the plants and technologies whose output is the focus of contracts. From the perspec­ tive of practice, the use of these contracting mechanisms, as facilitated by a new breed of B2B exchanges, represents an opportunity for further improving supply chain performance and capital asset productivity.

Authors and Affiliations

  • Operations and Information Management Department The Wharton School, University of Pennsylvania Jon M. Huntsman Hall, Philadelphia, USA

    Stefan Spinler

Bibliographic Information

  • Book Title: Capacity Reservation for Capital-intensive Technologies

  • Book Subtitle: An Options Approach

  • Authors: Stefan Spinler

  • Series Title: Lecture Notes in Economics and Mathematical Systems

  • DOI: https://doi.org/10.1007/978-3-642-19006-3

  • Publisher: Springer Berlin, Heidelberg

  • eBook Packages: Springer Book Archive

  • Copyright Information: Springer-Verlag Berlin Heidelberg 2003

  • Softcover ISBN: 978-3-540-00287-1Published: 21 January 2003

  • eBook ISBN: 978-3-642-19006-3Published: 06 December 2012

  • Series ISSN: 0075-8442

  • Series E-ISSN: 2196-9957

  • Edition Number: 1

  • Number of Pages: XVI, 143

  • Topics: Operations Research/Decision Theory, IT in Business

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