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Abstract—In this paper, we address the problem of designing flexible investment model where firm’s product demand is subject to variability. A flexible investment model is one that maintains maximize firm’s revenue despite fluctuations in the firm’s product demand levels. We extend existing procedures for design of investment by explicitly capturing the stochastic nature of firm’s product demand and the resulting variability in the price and (2) be determined simultaneously with the price of firm’s product output as a infers function of demand scenarios. Heuristic method is presented for generating flexible investment and determining allocations of spending under various demand conditions and other assumptions.
Index Terms—flexible investment, firm’s revenue, firm’s product demand, firm’s product output.
Ristono, A., is lecture in Industrial Engineering Department, University of Pembangunan Nasional “Veteran”, Yogyakarta, Indonesia 55281 (e-mail:agus_ristono@yahoo. com & agus_ristono@lycos.com).
T. C. Author is with the Electrical Engineering Department, University of Colorado, Boulder, CO 80309 USA, on leave from the National Research Institute for Metals, Tsukuba, Japan (e-mail: author@nrim.go.jp).
Cite: Agus Ristono, "Flexible Investment Design," International Journal of Innovation, Management and Technology vol. 2, no. 2, pp. 171-174, 2011.