Master scheduling with incremental capacity allocation and a rolling horizon

In this paper a new method for master production scheduling (MPS) is presented. The objective of this new method is to minimize schedule instability in the order driven company. In such companies the order arrival process is highly uncertain, and the production of an item is usually scheduled only after an order is received. Further, the customer usually demands a short delivery lead time. The new MPS method combines a rolling schedule approach with an overtime or subcontracting capability, and is labelled as MPS with incremental capacity allocation and a rolling horizon (MPS-IR). Two features distinguish this new approach. First, rather than allocating the entire production capacity of a future period at once, the MPS-IR does so in an incremental fashion over multiple periods. Second, rather than scheduling the entire demand for a future demand at once, the MPS-IR does so in an incremental fashion over multiple periods. In experimental tests the MPS-IR was found to outperform a Gantt chart based scheduler.