An evaluation of overtime policies for a repair shop

This article presents the first attempt to develop and examine overtime policies for a repair shop environment. Overtime is used to augment repair capacity as needed to offset short-term demand fluctuations. If overtime provides sufficient additional repair capacity, it may be possible to reduce investment in spare parts inventory. The use of overtime in a repair shop requires managerial attention to several issues. In this article, the following five issues are examined: (1) The relationship between overtime policies and spares stocking levels. (2) The timing of overtime-reactive or proactive. (3) The amount of overtime to use. (4) The level in the product structure at which overtime is most beneficial. (5) The priority scheduling and labor assignment policies used. Six overtime policies are developed that explore the above issues. These are examined using a simulation model of a hypothetical repair shop. Since the focus of the article is an overtime policies, a single labor assignment policy is used in conjunction with two priority scheduling rules. The results indicate that reactive overtime policies work well in this environment and overtime is most effective at the lowest level of the product structure, where repair times are relatively shorter. In addition, lowest level parts provide more usage flexibility to handle anticipated future failures.