Equalization of Runout Times

Abstract

The Equalization of Runout Times (ERT) rule has been suggested as a heuristic for allocating production capacity across a group of items with a common set up cost. A natural interpretation of this rule is given by showing that for a single allocation under certain conditions it maximizes the time at which the group will next be scheduled. An equivalent interpretation is that the rule minimizes remnant stocks. The case of multiple allocations is studied next and it is shown that applying the ERT rule myopically, minimizes the sum of discounted setup costs.