On practical resource allocation for production planning and scheduling with period overlapping setups

Capacity requirements planning is normally based on long-term demand forecasts and part type mix estimates. In the execution of a production plan, it must often be recognized that the capacity assumptions previously made are no longer valid. This is because the part type mix, the operator or machine availability, or the existence of additional resources has changed. This may lead to underload as well as to overload situations for particular time periods. This paper presents a mixed 0–1 model and outlines a practical algorithm to schedule the production quantities. Our approach takes into account all information available on the shop-floor level, such as: machine availability over the planning horizon, unit processing times for the part types, minor setup times (i.e. machine setups required when changing part types that belong to the same family), major setup times (i.e. machine setups required when changing part types that belong to different families), storable and non-storable resource availability and consumption, part type demand over the planning horizon, and bounds on production rate and backlogging. Furthermore, the model accounts correctly for costs corresponding to period overlapping setups. Also, the application of the model in some case studies is reported.