The effect of system configuration and ramp-up time on manufacturing system acquisition under uncertain demand

• We incorporate the ramp-up characteristics in capacity planning decisions.
• We model the ramp-up duration and partial capacity loss.
• We examine the tradeoff between response speed and customer service level.

The objective of this paper is to investigate the optimal allocation of capacity investments at the tactical decision-making level by incorporating the configuration characteristics of selected system alternatives comprising Dedicated Manufacturing Systems (DMS) and Reconfigurable Manufacturing Systems (RMS). Particularly, sequencing of stages in a series or a parallel configuration impacts the responsiveness in addressing capacity change requirements. We analyze what type of configuration is more suitable for a manufacturer in terms of service level and cost. We propose a mixed integer programming model by incorporating various ramp-up time patterns, which define system scalability lead time. By solving the MIP model to optimality, we aim to see how capacity is allocated to RMS and DMS based on system cost, system responsiveness, and reconfiguration speed. A discrete event simulation model is used to validate the MIP results under uncertain demand scenarios.