n this paper the problem of capacity planning under risk from demand and price/cost uncertainty of the finished products is addressed. The deterministic model is extended into a two-stage stochastic model with fixed recourse by means of various expected levels of demand as random. A recourse penalty is also included in the objective for both shortage and surplus in the finished products. The model is analyzed to quantify the risk using Markowitz mean-variance model.
Verma, A., Shuklal, N., Tyagi, S. & Mishra, N. (2014). Stochastic modeling and optimization of multi-plant capacity planning problem. International Journal of Intelligent Engineering Informatics, 2 (2 & 3), 139-165.