Tactical capacity planning in a real-world ETO industry case: A robust optimization approach

Andréa Nunes Carvalho*, Fabricio Oliveira, Luiz Felipe Scavarda

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

12 Citations (Scopus)

Abstract

Uncertainty has a significant impact on the stability and performance of engineering-to-order (ETO) production systems by affecting due date achievement, efficient resource allocation and the usage of nonregular working force. Proactive planning approaches consider information about uncertainty to protect the generated plans against future disruption. Likewise, this paper´s goal is to propose and apply a robust optimization model that addresses a tactical capacity planning problem by incorporating uncertainties regarding the duration of production processes. The model aims at solution robustness (or stability) and intends to enhance and support the decision-making process of a real-world ETO industrial setting. Monte Carlo simulation is employed to assess the simultaneous impact of multiple constraints on the robustness of the generated solutions. The computational results are adherent to the industry setting studied and show the effects of the conservatism level on the optimal values of the generated plans. To the best of our knowledge, this is the first robust optimization model for tactical capacity planning that explicitly addresses the ETO context.

Original languageEnglish
Pages (from-to)158-171
Number of pages14
JournalInternational Journal of Production Economics
Volume180
DOIs
Publication statusPublished - 1 Oct 2016
MoE publication typeA1 Journal article-refereed

Keywords

  • Decision support system
  • Engineer-to-order
  • Mathematical modelling
  • Uncertainty

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