Optimizing the workload of production units of a make-to-order manufacturing system

Abstract This paper proposes a production planning approach for a job shop type manufacturing company in electronics sector that operates with make-to-order (MTO) convention and has a high-mix production range. A novel Mixed Integer Linear Programming (MILP) model is proposed that finds workload-dependent planning horizon by making order acceptance decisions. Partial acceptance of orders and delayed internal target deliveries contribute to the novelty of the proposed model. We establish the complexity of the problem and solve real-life problem instances of a medium-size manufacturing company in the south of The Netherlands. Our computational results show that the proposed MILP model can allocate desired workload to work centers by dynamically adjusting the time horizon for production plans. Our approach can practically be used within reasonable times for daily updates of internal production targets. We perform a sensitivity analysis to show how the time horizon is determined with varying system conditions. The obtained workload amounts satisfy minimum requirements of production units, as this cannot be achieved by the current practice.