This paper focuses on a production planning problem in an assembly system o
perating on a make-to-order basis. Due dates are considered as constraints
in the problem, that is, tardiness is not allowed. The objective of the pro
blem is to minimise holding costs for final product inventory as well as wo
rk-in-process inventory. A non-linear mathematical model is presented and a
heuristic algorithm is developed using a solution property and a network m
odel for defining solutions of the problem. A series of computational tests
were done to compare the algorithm with a commercial planning/scheduling s
oftware and backward finite-loading methods that employ various priority ru
les. The results showed that the suggested algorithm outperformed the other
s.