Abstract
Manufacturing plays an increasingly important role in determining the competitiveness of the firm. However, corporate strategy is often formulated with little regard for how these decisions affect operations within the manufacturing system. Detailed models provide a necessary link between manufacturing performance and the functional policies followed by the firm, so that the strengths of the manufacturing system can be consistently reflected in strategic decisions.
This paper presents a scheduling model that relates the strategic decisions that determine the type of work that must ultimately be processed by the manufacturing system with the detailed decisions that determine how this work should be scheduled. The model accounts for varying processing time, delay penalty, and revenue characteristics among the jobs available for processing by a single facility, with jobs partitioned in multiple classes such that a setup is incurred each time two jobs of different classes are processed in succession. Given limited processing capacity, the objective is to simultaneously determine the subset of jobs to accept for processing and the associated order in which accepted jobs should be sequenced to maximize the total profit realized by the facility. Problem formulations and dynamic programming algorithms are presented for both the special case in which all available work is from a single job class, and the more general case involving multiple job classes. The insight derived from these models concerning the operational implications of strategic decisions is illustrated through a series of example problems, first focusing on the coordination of marketing and manufacturing policy, and finally by considering important issues related to manufacturing focus.
Similar content being viewed by others
References
Adam, E.E., and P.M. Swamidass. 1989. Assessing Operations Management from a Strategic Perspective. Journal of Management. 15, 181–203.
Anderson, J.C., G. Cleveland and R.G. Schroeder, 1989. Operations Strategy: A Literature Review. Journal of Operations Management. 8, 133–158.
Benders, J.F. 1962. Partitioning Procedures for Solving Mixed-Variable Programming Problems. Numerische Mathematik. 4, 238–252.
Berry, W.J., C.C. Bozarth, T.J. Hill and J.E. Klompmaker. 1991. Factory Focus: Seqmenting Markets from an Operations Perspective. Journal of Operations Management. 10, 363–387.
Bitran, G.R., and S.M. Gilbert. 1990. Sequencing Production on Parallel Machines with Two Magnitudes of Sequence Dependent Setup Cost. Journal of Manufacturing and Operations Management. 3, 24–52.
Blackburn, J.D. (ed.). 1991. Time Based Competition: The Next Battleground in American Manufacturing. Irwin, Homewood, IL.
Blazewicz, J. 1987. Selected Topics in Scheduling Theory. Anuals of Discrete Mathematics. 31, 1–60.
Bruno, J., and P. Downey. 1978. Complexity of Task Sequencing with Deadlines, Setup Times, and Changeover Costs. SIAM Journal on Computing. 7, 393–404.
Bruno, J., and R. Sethi. 1978. Task Sequencing in a Batch Environment with Setup Times. Foundations of Control Engineering. 3, 105–117.
Cohen, M.A., and J. Eliashberg. 1991. New Product Development: Quality, Timing, and the Marketing-Manufacturing Interface. Working Paper, Wharton School, University of Pennsylvania.
Cohen, M.A., and H.L. Lee. 1985. Manufacturing Strategy: Concepts and Methods. In The Management of Productivity and Technology in Manufacturing, P. Kleindorfer (ed.). Plenum Publishing, New York.
DeGroote, X. 1991. Flexibility and Marketing/Manufacturing Coordination. Working Paper 91/60/TM, INSEAD.
Eliashberg, J., and R. Steinberg. 1991. Marketing/Production Joint Decision Making. Working Paper 91-024, Wharton School, University of Pennsylvania.
Fine, C.H. 1993. Developments in Manufacturing Technology and Ecolomic Evaluation Models. In Handbooks in OR & MS, S.C. Graves et al. (eds.), 4.
Garey, M.R., D.S. Johnson, 1979. Computers and Intractability: A Guide to the Theory of NP-Completeness. Freeman, New York.
Graves, S.C. 1981. A Review of Production Scheduling. Operations Research. 29, 646–675.
Gupta, J. 1984. Optimal Schedules for Single Facility with Two Job Classes. Computers and Operations Research. 11, 409–413.
Gupta, J. 1988. Single Facility Scheduling with Multiple Job Classes. European Journal of Operational Research. 8, 42–45.
Hayes, R.H., and S.C. Wheelwright. 1984. Restoring Our Competitive Edge: Competing Through Manufacturing. John Wiley, New York.
Hill, T.J. 1989. Manufacturing Strategy: Text and Cases. Irwin, Homewood, IL.
Hill, T.J., and R.M.J. Duke-Wooley. 1983. Progression or Regression in Facilities Focus. Strategic Management Journal. 4, 109–121.
Jorgensen, S. 1986. Optimal Production, Purchasing, and Pricing: A Differential Game Approach. European Journal of Operational Research. 24, 64–76.
KARMARKAR, U.S., AND M.M. LELE. 1989. The Marketing/Manufacturing Interface: Strategic Issues. Working Paper CMOM 89-10, Simon Graduate School of Business Administration, University of Rochester.
LAWLER, E.L., J.K. LENSTRA, A.H.G. RINNOOY KAN AND D. SCHMOYS. 1993. Sequencing and Scheduling: Algorithms and Complexity. In Handbooks in OR & MS, S.C. Graves et al. (eds.), 4, 445–522.
Lindsley, W.B., J.D. Blackburn and T. Elrod. 1991. Time and Product Variety Competition in the Book Distribution Industry. Journal of Operations Management. 10, 344–362.
Mason, A.J., and E.J. Anderson. 1991. Minimizing Flow Time on a Single Machine with Job Classes and Setup Times. Naval Research Logistics. 38, 333–350.
Monma, C.L., and C.N. Potts. 1989. On the Complexity of Scheduling with Batch Setup Times. Operations Research. 37, 798–804.
Montgomery, D., and W. Hausman. 1986. Managing the Marketing/Manufacturing Interface. Gestion 2000: Management and Perspective. 5, 69–85.
Porteus, E.L. 1985. Investing in Reduced Setups in the EOQ Model. Management Science. 31, 998–1010.
Porteus, E.L., and S. Whang. 1991. On Manufacturing/Marketing Incentives. Management Science. 37, 1166–1181.
Shapiro, B.P. 1977. Can Marketing and Manufacturing Coexist? Harvard Business Review. 55, 104–114.
Skinner, W. 1969. Manufacturing: Missing Link in Corporate Strategy. Harvard Business Review. 47, 136–145.
Skinner, W. 1974. The Focused Factory. Harvard Business Review. 52, 113–121.
Skinner, W. 1978. Manufacturing in Business Strategy. John Wiley, New York.
Skinner, W. 1985. Manufacturing: The Formidable Competitive Weapon. John Wiley, New York.
SOGOMONIAN A.G., AND C.S. TANG. 1990. A Modeling Framework for Coordinating Promotion Decisions Within a Firm. Working Paper, Graduate School of Management, UCLA.
Stalk, G. 1988. Time: The Next Source of Competitive Advantage. Harvard Business Review. 66, 41–51.
Stalk, G., and T. Hout. 1990. Competing Against Time: How Time Based Competition is Reshaping Global Markets. The Free Press, New York.
St. John, C. 1986. Operations Strategy: A Review and Bibliography. Operations Management Review. 4, 26–32.
Tang, C.S. 1990. Scheduling Batches on Parallel Machines with Major and Minor Setups. European Journal of Operational Research. 46, 28–37.
Webster, S. and K. Baker. 1995. Scheduling Groups of Jobs on a Single Machine. Operations Research. 43, 692–703.
Welam, U.P. 1977. On a Simultaneous Model for Marketing, Production, and Finance. Management Science. 23, 1005–1009.
Wittrock, R.J. 1986. Scheduling Parallel Machines with Setups. Research Report, IBM Watson Research Center, Yorktown Heights, NY.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Daniels, R.L., Kouvelis, P. & Morgan, L.O. Using profit maximizing scheduling models to structure operational trade-offs and manufacturing strategy issues. J Glob Optim 9, 255–291 (1996). https://doi.org/10.1007/BF00121675
Issue Date:
DOI: https://doi.org/10.1007/BF00121675