{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,5,3]],"date-time":"2026-05-03T03:07:07Z","timestamp":1777777627253,"version":"3.51.4"},"reference-count":20,"publisher":"Emerald","issue":"1-2","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"published-print":{"date-parts":[[2017,12,21]]},"abstract":"<jats:p>This paper examines the interaction between operational flexibility and financial flexibility in a multi-product business unit that makes operational decisions based on financial resources provided by its parent company (or headquarters). We capture operational flexibility through investment in flexible technology and financial flexibility through higher availability of financial resources. We consider the flexible-versus-dedicated technology choice and capacity investment decisions of a two-product business unit under demand uncertainty in the presence of budget constraints. The unit operates under a capital budget for financing the capacity investment, and an operating budget, which is uncertain in the capacity investment stage, for financing the production. We investigate how financial flexibility in the capacity investment stage (as captured by the stringency of the capital budget) and financial flexibility in the production stage (as captured by the likelihood of having sufficient operating budget to fully cover the production cost) shape the optimal technology choice. We identify the critical role that the relative capacity intensity (the ratio of unit capacity cost to total unit capacity and production cost) of each technology plays. Our results have implications about how to deploy technologies with different capacity intensity profiles, which are shaped by automation level or plant location choices.<\/jats:p>","DOI":"10.1561\/0200000077","type":"journal-article","created":{"date-parts":[[2017,12,21]],"date-time":"2017-12-21T08:54:23Z","timestamp":1513846463000},"page":"13-31","source":"Crossref","is-referenced-by-count":0,"title":["The Interaction between Operational Flexibility and Financial Flexibility"],"prefix":"10.1108","volume":"11","author":[{"given":"Onur","family":"Boyabatli","sequence":"first","affiliation":[{"name":"Lee Kong Chian School of Business, Singapore Management University"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Tiecheng","family":"Leng","sequence":"additional","affiliation":[{"name":"Lingnan College, Sun Yat-sen University ,","place":["China"]}],"role":[{"role":"author","vocabulary":"crossref"}]}],"member":"140","published-online":{"date-parts":[[2017,12,21]]},"reference":[{"issue":"4","key":"2026042203202768800_ref001","doi-asserted-by":"publisher","first-page":"583","DOI":"10.1287\/msom.1090.0284","article-title":"Independence of Capacity Ordering and Financial Subsidies to Risky Suppliers","volume":"12","author":"Babich","year":"2010","journal-title":"Manufacturing & Service Operations Management"},{"issue":"7","key":"2026042203202768800_ref002","doi-asserted-by":"publisher","first-page":"935","DOI":"10.1287\/mnsc.1040.0252","article-title":"Pre-IPO Operational and Financial Decisions","volume":"50","author":"Babich","year":"2004","journal-title":"Management Science"},{"issue":"1","key":"2026042203202768800_ref003","doi-asserted-by":"publisher","first-page":"225","DOI":"10.1287\/mnsc.2014.2093","article-title":"The Impact of Budget Constraints on Flexible vs. Dedicated Technology Choice","volume":"62","author":"Boyabatl\u0131","year":"2016","journal-title":"Management Science"},{"issue":"12","key":"2026042203202768800_ref004","doi-asserted-by":"publisher","first-page":"2163","DOI":"10.1287\/mnsc.1110.1395","article-title":"Stochastic Capacity Investment and Flexible vs. Dedicated Technology Choice in Imperfect Capital Markets","volume":"57","author":"Boyabatl\u0131","year":"2011","journal-title":"Management Science"},{"key":"2026042203202768800_ref005","article-title":"Steel to plastics price rises start to hurt industry","author":"Bream","year":"2008","journal-title":"English"},{"issue":"9","key":"2026042203202768800_ref006","doi-asserted-by":"publisher","first-page":"1274","DOI":"10.1287\/mnsc.1040.0278","article-title":"Inventory Management with Asset-Based Financing","volume":"50","author":"Buzacott","year":"2004","journal-title":"Management Science"},{"issue":"1","key":"2026042203202768800_ref007","doi-asserted-by":"publisher","first-page":"116","DOI":"10.1016\/j.jfineco.2010.08.006","article-title":"The effect of banking crisis on bank-dependent borrowers","volume":"99","author":"Chava","year":"2011","journal-title":"Journal of Financial Economics"},{"issue":"3","key":"2026042203202768800_ref008","doi-asserted-by":"publisher","first-page":"708","DOI":"10.1287\/mnsc.2013.1777","article-title":"Resource Flexibility and Capital Structure","volume":"60","author":"Chod","year":"2014","journal-title":"Management Science"},{"key":"2026042203202768800_ref009","article-title":"Automobiles Industry Profile: Global","author":"Data-Monitor","year":"2009"},{"key":"2026042203202768800_ref010","article-title":"BMW keeps the home fires burning","author":"Edmondson","year":"2005","journal-title":"Business Week"},{"issue":"1","key":"2026042203202768800_ref011","doi-asserted-by":"crossref","first-page":"194","DOI":"10.1111\/j.1937-5956.2011.01240.x","article-title":"Design of Flexible Multi-Stage Processes","volume":"21","author":"Eynan","year":"2012","journal-title":"English. 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