RESOURCE PLANNING MRP II The capacity planning problem in make-to-order enterprises
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The capacity planning problem in make-to-order enterprises. MRPII 60 Chin-ShengChenb,SiddharthMestryb,PurushothamanDamodarana,∗,ChaoWangb aDepartmentofIndustrialandSystemsEngineering,NorthernIllinoisUniversity,DeKalb,IL60115,UnitedStates bDepartmentofIndustrialandSystemsEngineering,FloridaInternationalUniversity,Miami,FL33174,UnitedStates A R T I C L E I N F O Article history: Received2October2007 Accepted15July2009 KEYWORDS: Capacity planning; Make-to-order; Product mix; Production planning; Operations management A B S T R A C T Thispaperaddressestheshort-termcapacityplanningprobleminamake-to-order(MTO) operationenvironment. Amathematicalmodelispresentedtoaidanoperationsmanager in an MTO environment to select a set of potential customer orders to maximize the operational profit such that all the selected orders are fulfilled by their deadline. With a given capacity limit on each source for each resource type, solving this model leads to an optimal capacity plan as required for the selected orders over a given (finite) planning horizon. The proposed model considers regular time, overtime, and outsourcing as the sourcesforeachresourcetype. ByapplyingthismodeltoasmallMTOoperation,thispaper demonstrates a contrast between maximal capacity utilization and optimal operational profit.
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