Simultaneous investment, operations, and financial planning in supply chains: A value-based optimization approach

Asset utilization is a major mid‐term lever to increase shareholder value creation. Since rough‐cut planning of capacity (dis‐)investments is performed at the long‐term level, detailed timing of adjustments remains for the mid‐term level. In combination with capacity control measures, capacity adjustment timing can be used to optimize asset utilization. This paper provides a corresponding framework for value‐based performance and risk optimization in supply chains covering investment, operations, and financial planning simultaneously. We illustrate the benefits of the approach using a case‐oriented example, and highlight the value of using flexible capacity options and postponing of capacity‐related decisions in an uncertain environment.