The impact of workforce level restriction on the performance of the linear decision rule: an exploratory production planning study
| DOI | https://doi.org/10.1108/02635579910274479 |
| Pages | 156-164 |
| Date | 01 June 1999 |
| Published date | 01 June 1999 |
| Author | Joao Lisboa,Mahmoud Yasin |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
The impact of workforce level restriction on the
performance of the linear decision rule: an
exploratory production planning study
Joao Lisboa
Universidade Coimbra, Coimbra, Portugal
Mahmoud Yasin
East Tennessee State University, Johnson City, Tennessee, USA
Background
Traditionally, the aggregate production
planning process has been critical to the
success of most business organizations.
However, in recent years, aggregate produc-
tion planning (APP) is becoming even more
critical than ever before (Swinehart et al.,
1996). The increasing significance of the
impact of aggregate production planning
(APP) on today's business organization is
attributed to a host of new organizational
realities. JIT, increasing customer sophisti-
cation, new production/operations technolo-
gies and new partnerships between
management and the workforce are just a few
of the factors which are responsible for
changing how today's business organizations
view the aggregate production planning pro-
cess scope, objective and organizational role
(Yasin et al., 1997).
Since the 1950s the scope of aggregate
production planning has involved the task of
simultaneously determining the firm's output
level and employment level over a specified
time frame. The objective of this process was
to minimize total relevant costs given a fixed
production capacity. Method used to achieve
this objective centered around optimal as
well as non-optimal models (Holt et al., 1955,
1960; Taubert, 1968; Goodman, 1974; Oliff and
Leong, 1987). Recently, researchers have
attempted, with some success, to overcome
some of the limitations of classical aggregate
planning models (Bakir and Byrne, 1994;
Sengupta, 1994; Shen, 1994; Kogan and
Khmelnitsky, 1995; Nam and Logendran, 1995;
Nagarur et al., 1997; Reiter, 1997).
Critics have argued with some justification
that aggregate production planning models
often found in the literature have little use for
practicing managers (Bowman, 1963; Melli-
champandLove,1978).Forexample,the
assumption by some aggregate production
planning models regarding the variability of
workforce level may not be desirable. This is
especially true in the case of business
organizations which are attempting to utilize
constant workforce to promote JIT, TQM and
CQI. It is also true for business organizations
operating in a business environment where
hiring and lay-off practices are restricted by
law, as in the case of some European countries.
The objective of this paper is to empirically
examine the impact of relaxing the workforce
assumption of a classical aggregate produc-
tion planning model. In the process, the
solutions to the aggregate production pro-
blem with and without workforce level
restriction are compared.
The nature of the problem
The problems and decisions involved in
setting the aggregate production rate and the
size of the workforce have been largely
investigated since the study by Holt et al.
(1955, 1960). Given the demand for each period
(t) and a planning horizon which extends
over (T) periods, the objective is to determine
the production level (Pt), inventory level (It),
and workforce size (Wt) for t = 1,2,3...12 which
minimize relevant costs over the planning
horizon. To deal with the fluctuations of the
demand, managers may use one or a combi-
nation of the following strategies:
1 Change the production level by altering
the size of workforce through firing and
lay-offs.
2 Change the production level through the
use of overtime or undertime, holding the
workforce constant.
3 Maintain a constant production level,
thus allowing changing inventory level to
take care of fluctuation in demand.
In general, studies dealing with aggregate
production planning have treated the work-
force as a variable. Frequent changes in the
level of the workforce are allowedto deal with
the fluctuating demand. In some European
countries, however, governmental regula-
tions do not allow managers to decrease the
level of workforce for a particular period in
[ 156 ]
Industrial Management &
Data Systems
99/4 [1999] 156±158
#MCB University Press
[ISSN 0263-5577]
Keywords
Employees, Optimization,
Production planning
Abstract
This study examines the impact of
workforce level restriction on the
aggregate production planning
problem. Based on the results of
this study, it is concluded that the
solution to the aggregate produc-
tion problem appears to be the
same regardless of workforce level
restriction. Additional research
utilizing multi-industry large-scale
data is needed to test the applic-
ability of findings derived from the
current study.
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