CAPACITY PRODUCTION SCHEDULING

Capacity Production Scheduling

Capacity Production Scheduling

The problem of how to invest in production capacity is complicated by the effect of the capacity to buy the inventory when multiple products are produced. This paper analyzes the decisions of the ability to batch processes (eg blast furnaces), whose processing times are independent of lot size. Unfortunately, industry front batches are often poorly matched to demand back-end products. For example, economies of scale may lead firms to invest in large-scale facility [2]. This, however, can lead companies to make substantial inventories to compensate for the lack of production flexibility inherent in a large-scale installation. Although not the only reason, this flexibility may partially explain the recent trend towards mini-mills in the steel industry in the U.S..

A key element of the effect of the nature of the capacity in the inventory is that several small plants can operate with less total inventory of a large single system. Figure 1 shows an example of product of two under two scenarios: a large facility, and two smaller facilities. The ability of each of the two small facilities is exactly half of the large installation. In both cases, the available capacity is fully utilized and all facilities are operating a cycle rotation plan cyclical. In a batch process, the final product is not available until the entire batch is completed. In the case of a large facility, when a batch of product A will probably take [Tau] units of time until the next batch of product A becomes available. In the case of two small facilities, the production of each product can be staggered, so that when a batch of product A is completed just last [Tau] / 2 units of time until the next batch of product A is available. Clearly, the two ...