A tactical planning model for mixed-model electronics assembly operations

This paper develops an optimization model and methodology to support tactical planning in a high mix, low volume electronics assembly environment. The model assigns product families to parallel surface mount assembly lines to minimize setup cost on the placement machines while ensuring that the facilities are not overloaded. To capture the impact of product assignment decisions on setup cost, we consider a partial setup policy of mounting some components permanently on each placement machine and loading other components as needed for each product. We formulate the tactical planning problem as an integer program, and show that even the special case of minimizing the setup cost on a single placement machine, for a given assignment of products, is NP-hard. Our solution method for the general problem, based on column generation, provides both heuristic solutions and lower bounds. Two subproblems that we solve – a product selection subproblem and a setup optimization subproblem – might be independently useful for short-term production planning. Computational experience shows that the approach is effective, providing solutions that are within 1.5% of optimality on average and reducing setup costs considerably compared to a complete setup policy.