| Operational flexibility has been attractive in many industries to hedge against demand uncertainty and to promote profits by decreasing lost sales, saving on investments and providing higher quality service. Hence, it is extremely important to develop quantitative models that will provide insights on how to manage systems with some form of flexibility in their operations. In this research, we propose to study optimal capacity investment, resource allocation and pricing decisions of a central decision maker that manages multiple resources which can be utilized flexibly to satisfy demands from multiple market segments. The main objectives of the proposed research are (1) to develop quantitative models in order to determine the optimal capacity investment decisions for multiple resources that can be used flexibly to satisfy stochastic demands from multiple customer segments, (2) to develop easy-to-implement computational algorithms for computing optimal or near-optimal solutions, (3) to quantify the benefits of managing multiple resources that can be used flexibly. |
