Capacity expansion and capital investment decisions using the Economic Investment Time Model: a case oriented approach

Abstract

Capacity planning is an area in which engineers can affect business performance. The size of the expansions and the timing in which they take place are the most important variables in capacity planning. The Economic Investment Time (EIT) Model is a tool that enables planners to accurately determine the investment time in which profits resulting from the proposed expansion can be maximized. This thesis presents the results yielded by the EIT. Validation is performed using the utilization results yielded by the Newsboy Model. This paper explains the methodology used and the conclusions that can be drawn.