ON PERFORMANCE MODELING OF PROJECT-ORIENTED PRODUCTION

A methodology has been developed in order to incorporate a performance perspective into production planning. The concept of project-oriented production has been used to emphasize a hierarchical structure for analysis and decision making. Based on a new type of resource workload model, the methodology has been applied to estimate the speed-up of each project for different levels of the resources assigned to it. We introduce the notion of leverage to trade-off resource usage or efficiency with each project duration or makespan. Using leverage we are able to find for each project the optimal level of resources that minimize peak demands through variation of aggregate activity intensities. Project performance has been integrated within production planning using a two-tier iterative scheme. In the upper level, resource leveraging is carried out. In the lower level, feasibility constraints are applied to adjust aggregate activity intensities and project milestones. This process is implemented interactively until a solution consistent with managementʹs objectives is obtained. The most attractive feature of this strategy is that only extreme (early and late) schedules are required. © 1997 Elsevier Science Ltd