Heuristics for capacity planning problems with congestion

  • Authors:
  • Sukgon Kim;Reha Uzsoy

  • Affiliations:
  • School of Industrial Engineering, Purdue University, West Lafayette, IN 47907-2023, USA;Edward P. Fitts Department of Industrial and Systems Engineering, North Carolina State University, Raleigh, NC 27695-7906, USA

  • Venue:
  • Computers and Operations Research
  • Year:
  • 2009

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Abstract

Motivated by a problem in the semiconductor industry, we develop improved formulations for the problem of planning capacity acquisition and deletion over time when resources are subject to congestion, motivated by a problem in the semiconductor industry. We use nonlinear clearing functions to relate the expected output of a production resource in a planning period to the expected work in process (WIP) inventory level. Exploiting the properties of the clearing function allows us to formulate the single workcenter problem as a shortest path problem. This forms the basis for two greedy constructive heuristics and a Lagrangian heuristic for the multistage problem. The latter procedure also provides lower bounds on the optimal value. We present computational experiments showing that the proposed heuristics obtain high-quality solutions in modest CPU times.