A labour-constrained model for aggregate production planning

Abstract

In today's business environment where workers' participation and teamwork have been widely adopted, it is not desirable to employ a layoff and hiring strategy to solve the problems of changing demand because of its negative impact on job security and workers' moral. In this paper, an aggregate production planning model that considers the level of employment as a constant over time is constructed. In addition to deriving the model mathematically, actual data from a Portuguese building material company are used to demonstrate the implementation of such a model. The solution provided by the model could reduce the total relevant cost of the company by as much as 8.1%.