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Strategic Capacity Management: Capacity ...

Chao, Raul O., Gol...

Technical Note

Strategic Capacity Management: Capacity Growth Planning—Dynamic Expansion

Chao, Raul O.; Goldberg, Rebecca

OM-1659 | Published September 18, 2025 | 3 Pages Technical Note

Collection: Darden School of Business

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Product Details

This technical note is part of a set that focuses on strategic capacity management, including economies of scale and scope, the make-or-buy decision, and dynamic capacity expansion. While designed to be used together, these three notes can also be used as stand-alone documents to support particular learning objectives. The other notes in this set are “Strategic Capacity Management: Economies of Scale and Scope” (UVA-OM-1657) and “Strategic Capacity Management: Capacity Growth Planning—Make or Buy?” (UVA-OM-1658). These materials form one module in our collection of introductory operations management topics, and all are appropriate for an advanced undergraduate- or graduate-level introductory course on operations management. The complete list of the materials in this collection is available in the teaching materials included with this technical note.

1. Explore how a firm can leverage economies of scale or scope to lower unit cost and achieve other benefits. 2. Discuss the make-or-buy decision as a strategic management tool and give appropriate examples of each decision for different firm contexts. 3. Present dynamic capacity expansion as a function of a firm’s long-term strategy to maximize either capacity utilization or market share, and discuss the high-level trade-offs between each strategy.