Lot-sizing problem with setup times in labor-based capacity production systems

In many production systems, capacities depend not only on machine capacities, but also on the available work-force levels in each period of the planning horizon. Therefore, these capacities are given in terms of labor hours. In order to develop aggregate plans, work-force levels should be established first, and then translated into available regular-time and overtime production capacities. In this paper, we suggest an integrated approximation procedure that generates efficient aggregate plans based on staffing mixed strategies. We first develop an algorithm that produces an efficient mixed strategy-based staffing plan. The labor capacities resulting from this algorithm are then translated into available regular-time and overtime unit production capacities. These capacities are finally integrated into another algorithm to generate the final aggregate plan.