The Timing of Capacity Investment with Lead Times: When Do Firms Act in Unison?

• 成果类型: Article
• 署名作者: Anderson, Edward James; Yang, Shu-Jung Sunny
• 署名单位: University of Sydney; University of Southampton; Solent University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12204
• 发表日期: 2015
• 页码: 21-41
• 关键词: capacity investment timing; lead time; volume flexibility; existing capacity; operations strategy

摘要

We study competitive capacity investment for the emergence of a new market. Firms may invest either in capacity leading demand or in capacity lagging demand at different costs. We show how the lead time and other operational factors including volume flexibility, existing capacity, and demand uncertainty impact equilibrium outcomes. Our results indicate that a type of bandwagon behavior is the most likely equilibrium outcome: if both firms are going to invest, then they are most likely to act in unison. Contrary to much received wisdom, we show that leader-follower behavior is very uncommon in equilibrium where firms do not have volume flexibility, and will not occur at all if lead times are sufficiently short. On the other hand, if there is volume flexibility in production, then the likelihood of this sequential investment behavior increases. Our findings underscore the importance of operational characteristics in determining the competitive dynamics of capacity investment timing.