The activity-based aggregate production planning with capacity expansion in manufacturing systems

This paper builds a mixed integer linear programming (MILP) model to mathematically characterize the problem of aggregate production planning (APP) with capacity expansion in a manufacturing system including multiple activity centers. We use the heuristic based on capacity shifting with linear relaxation to solve the model. Two linear relaxations, i.e., a complete linear relaxation (CLR) on all the integer variables and a partial linear relaxation (PLR) on part of the integer variables are investigated and compared in computational experiments. The computational results show that the heuristic based on the capacity shifting with CLR is very fast but yields low-quality solution whereas the capacity shifting with PLR provides high-quality solutions but at the cost of considerable computational time. As a result, we develop a hybrid heuristic combining beam search with capacity shifting, which is capable of producing a high-quality solution within reasonable computational time. The computational experiment on large-scale problems suggests that when solving a practical activity-based APP model with capacity expansion at the industrial level, the capacity shifting with CLR is preferable, and the beam search heuristic could be subsequently utilized as an alternative if the relaxation gap is larger than the acceptable deviation.

► An activity-based APP model with capacity expansion is built as an MILP.
► The model integrates product structure and production processes in the APP plan.
► We investigate the capacity shifting algorithm based on relaxations of the model.
► We develop a hybrid heuristic combining beam search with capacity shifting.