An Integrated Two-Echelon Inventory and Workforce Planning Model with Variable Production Rates

In this proposal, a new integrated supply chain model is proposed. We consider a two echelon manufacturing systems with variable production rates, where the production lead times can be reduced by operating the systems at different production speeds. In the economic lot-sizing literature is very common to assume fixed production rates. However, this assumption is not always true, especially in flexible production systems. In contrast, most economic lot-sizing models with variable production rates do not provide or explain an explicit mechanism to vary the rate of production (as examples: varying the cutting speed of a lathe machine, working overtime ). In economics and econometrics, the rate of production is usually modelled using the production function concept, a model which links productivity to the level of existing resources, like capital and labor. In this proposal, a two-echelon economic lot-sizing and manpower planning model is proposed. The contribution of the proposed work is in integrating workforce planning in a two-echelon supply chain system and using the production function concept to study the impact of workforce planning on the addressed supply chain system, taking the lot-sizing and manpower panning decisions in an integrated manner. Moreover we study the impact of manpower planning decisions on the proposed supply chain system. An efficient solution technique will be proposed along with numerical examples to provide managerial insights.