Multi-objective master production scheduling in make-to-order manufacturing

In this paper a multi-objective, long-term production scheduling in make-to-order manufacturing is considered and a lexicographic approach with a hierarchy of integer programming formulations is proposed. The problem objective is to allocate customer orders with various due dates among planning periods with limited capacities to minimize the number of tardy orders as a primary optimality criterion. Then, the maximum level of the input and output inventory is minimized as a secondary criterion, and finally the aggregate production is leveled over the planning horizon as an auxiliary criterion. A close relation between minimizing the maximal inventory and the maximum earliness of customer orders is shown and used to simplify the inventory leveling problem. Numerical examples, modeled after a real-world make-to-order flexible flowshop in a high-tech industry, are provided and some computational results are reported. The paper indicates that the maximum earliness of customer orders is an important managerial decision variable, and its minimum value can be applied to control the inventory of purchased materials and finished products to maximize the customer service level and minimize production costs.