CAPACITY PLANNING FOR PHASED IMPLEMENTATION OF FLEXIBLE MANUFACTURINGSYSTEMS UNDER BUDGET RESTRICTIONS

We consider a problem of gradually replacing conventional dedicated ma chines with flexible manufacturing modules (FMMs) under budget restric tions over a finite planning horizon assuming that dedicated machines cannot be purchased during the planning horizon and acquired FMMs are kept until the end of the horizon. In the problem, a replacement sched ule is to be determined and operations are to be assigned to the FMMs or the dedicated machines with the objective of minimizing the sum of discounted costs of acquisition and operation of FMMs and operation co sts of conventional dedicated machines. In this research, the problem is formulated as a mixed integer linear program and solved by a Lagran gean relaxation approach. A subgradient optimization method is employe d to obtain lower bounds of solutions and a multiplier adjustment meth od is devised to improve the lower bounds. We develop a linear program ming-based Lagrangean heuristic algorithm to find a good feasible solu tion of the original problem in a reasonable amount of computation tim e. The algorithm is tested on randomly generated test problems and the results are reported. (C) 1998 Elsevier Science B.V.