When planning the design and operation of a manufacturing system in wh
ich numerically controlled (NC) machine tools are used to produce a va
riety of parts, a number of important factors must be taken into consi
deration. This paper addresses certain of these design and operational
planning problems and develops a supporting optimization framework. A
methodology is proposed for machining batches of parts on groups of m
achines in a way that accounts for machine loads and tool assignments.
The models we develop consider the effects of variability and correla
tion of the demands among the parts. This is done so that the manufact
uring system could accommodate wide fluctuations in demand without the
machines suffering from significant over- and under-capacity utilizat
ion during the system's dynamic operation. The proposed approach is an
integrative one, which recognizes the decisions that have to be made,
the sequence in which they must be made, the computational complexity
of the problem, and various operational constraints.