Workload allocation in multi-product, multi-facility production systems with setup times

In this article, we model the problem of assigning work to M heterogeneous servers (machines), which arises from exogenous demands for N products, in the presence of nonzero setup times. We seek a workload allocation which minimizes the total expected Work-In-Progress (WIP) inventory. Demands are assumed to arrive according to independent Poisson processes, but the setup and the processing times can have arbitrary distributions. Whenever a machine produces more than one product type, production batch sizes are determined by a group scheduling policy; which is also known as the cyclic-exhaustive polling policy. We formulate the workload allocation problem as a nonlinear optimization problem and then provide several insights gleaned from first order necessary conditions, from numerical examples, and from a close examination of the objective function. For example, we show that increasing either the load or the number of products assigned to a machine, or both, does not necessarily increase its contribution to total WIP. These insights are then used to devise a heuristic workload allocation as well as a lower bound. The heuristic allocation is further refined using a nonlinear optimization algorithm.