Plant flexibility planning: Problem formulation and performance estimation

Manufacturing systems are becoming more and more flexible to confront uncertainty in demands of multiple product types. In this paper, we study planning and management of plant flexibility in manufacturing systems from the perspective of demand shortfall and service level, as functions of setup time, inhomogeneous capacities and demand distributions. Closed-form bounds of demand shortfall as well as accurate estimate of service level are obtained. Sensitivity analyses of service level with respect to reductions in setup time, downtime and cycle time are carried out, and the impact of new product launch and product correlation on system flexibility is investigated.