THE IMPACT OF THE COST OF UNUSED CAPACITY ON PRODUCTION PLANNING OF FLEXIBLE MANUFACTURING SYSTEMS

Abstract

Capacity is one of the most important measures of resources used in production. The conventional capacity measures do not include the value of the equipment in the production system and so their application can lead to erroneous operations management decisions. A new measure, the `cost of unused capacity´, is more frequently used to characterize resource usage. Flexible manufacturing systems (FMS), where the machining methods, machine tools, handling equipment, control systems and computer systems are used in an integrated way, become rather complex. Under these circumstances the process of production planning turns into a more complicated one, and as a consequence of the high value of the resources the drive for decreased cost of unused capacity is significant. A linear programming model was formulated with the aim of taking into consideration the cost of unused capacity. The model makes it possible to take into account the unused capacities of various machines in different degrees, while increasing the contribution at the same time. If the cost of unused capacity is considered in capacity planning, the idle time of valuable resources can be exploited more efficiently.