Capacity Allocation

Martin A Lariviere

doi:10.1002/9780470400531.eorms0132

Capacity Allocation

Martin A Lariviere

Managerial Economics, Decision Sciences and Operations

Research output: Chapter in Book/Report/Conference proceeding › Entry for encyclopedia/dictionary

Abstract

A capacity allocation mechanism allows a supplier to apportion output among downstream buyers when submitted orders exceed available capacity. Some buyers will not receive their full request. How the allocation mechanism determines who is shorted and the extent of the shortfall affects how buyers order. Consequently, the allocation mechanism can have a significant impact on supply-chain performance. In this article, we first discuss the role allocation mechanisms have had in practice and then review academic research on allocation mechanisms. We consider both, single-period models in which today's orders determine today's allocations as well as multiperiod models in which today's sales determine tomorrow's allocations.

Original language	English (US)
Title of host publication	Wiley Encyclopedia of Operations Research and Management Science
Editors	James J. Cochran
Publisher	John Wiley & Sons, Inc.
ISBN (Electronic)	9780470400531
DOIs	https://doi.org/10.1002/9780470400531.eorms0132
State	Published - 2010

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10.1002/9780470400531.eorms0132

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title = "Capacity Allocation",

abstract = "A capacity allocation mechanism allows a supplier to apportion output among downstream buyers when submitted orders exceed available capacity. Some buyers will not receive their full request. How the allocation mechanism determines who is shorted and the extent of the shortfall affects how buyers order. Consequently, the allocation mechanism can have a significant impact on supply-chain performance. In this article, we first discuss the role allocation mechanisms have had in practice and then review academic research on allocation mechanisms. We consider both, single-period models in which today's orders determine today's allocations as well as multiperiod models in which today's sales determine tomorrow's allocations.",

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AB - A capacity allocation mechanism allows a supplier to apportion output among downstream buyers when submitted orders exceed available capacity. Some buyers will not receive their full request. How the allocation mechanism determines who is shorted and the extent of the shortfall affects how buyers order. Consequently, the allocation mechanism can have a significant impact on supply-chain performance. In this article, we first discuss the role allocation mechanisms have had in practice and then review academic research on allocation mechanisms. We consider both, single-period models in which today's orders determine today's allocations as well as multiperiod models in which today's sales determine tomorrow's allocations.

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DO - 10.1002/9780470400531.eorms0132

M3 - Entry for encyclopedia/dictionary

BT - Wiley Encyclopedia of Operations Research and Management Science

A2 - Cochran, James J.

PB - John Wiley & Sons, Inc.

ER -

Capacity Allocation

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