Given a set of m resources and n tasks, the dynamic capacity acquisi- tion and assignment problem seeks a minimum cost schedule of capacity acquisitions for the resources and the assignment of resources to tasks, over a given planning horizon of T periods. This problem arises, for example, in the integrated planning of locations and capacities of distri- bution centers (DCs), and the assignment
... [Show full abstract] of customers to the DCs, in supply chain applications. We consider the dynamic capacity acquisition and assignment problem in an environment where the assignment costs and the processing requirements for the tasks are uncertain. Using a sce- nario based approach, we develop a stochastic integer programming model for this problem. The highly non-convex nature of this model prevents the application of standard stochastic programming decomposition algo- rithms. We use a recently developed decomposition based branch-and- bound strategy for the problem. Encouraging preliminary computational results are provided.