CHAPTER FOUR: OPERATIONS PLANNING AND CONTROL

4.1 Aggregate Planning

Objectives:

On successful completion of this chapter, you should be able to:

 Define aggregate planning

 Identify optional strategies for developing an aggregate plan
 Understand the strategies required during aggregate planning
 Solve an aggregate plan via the transportation method of linear programming

4.1.1 Concept of Aggregate Production Planning

Aggregate plan: Aggregate planning is the process of planning the quantity and timing of output over
the intermediate range (often 3 to 18 months) by adjusting the production rate, employment,
inventory, and other controllable variables. Aggregate planning links long-range and short-range planning
activities statement of a company’s production rates, workforce levels, and inventory holding based estimates
of customer requirements and capacity limitations. It is ‘’aggregate’’ in the sense that the planning activities
at this early stage are concerned with homogeneous categories (families) such as gross volumes of
products or number of customers served. Within this range, the physical facilities are assumed to be fixed
for the planning period. Therefore, fluctuations in demand must be met by varying labour and inventory
schedule. Aggregate planning seeks the best combination to minimize costs.

Production plan: a manufacturing firm’s aggregate plan, which generally focuses on production rate and
inventory holdings.

4.1.2 Typical Objectives

The many functional areas in an organization that give input to the aggregate plan typically have conflicting
objective for the use of the organization’s resources. Six objectives usually are considered during development
of a production or staffing plan, and conflicts among them may have resolved:

1. Minimize cost/maximize profit: if customer demand is not affected by the plan, minimizing cost will
also maximize profit.
2. Maximize customer service: improving delivery time and on time delivery may require additional
workforce, machine capacity or inventory resources.
 3. Minimize inventory investment: inventory accommodations are expensive because the money could
be used for more productive investments.
4. Minimize changes in production rate: frequent change in production rates can cause difficulties in
coordinating the supplying of materials and required production line rebalancing.
5. Minimize changes in workforce levels: fluctuating workforce levels may cause lower productivity
because new employees typically need time to fully productive.
6. Maximize utilization of plant and equipment: process based on a line flow strategy requires
uniformly high utilization of plant and equipment.

The weight given to each one in the plan involves cost trade-offs and consideration of non-quantifiable
factors. Balancing these various objectives to arrive at an acceptable aggregate plan involves consideration of
various alternatives. The two basic types of alternatives are reactive and aggressive.

For effective and efficient aggregate planning process the following points are required:

 A logical overall unit for measuring sales and output

 A forecast of demand for an intermediate planning period in these aggregate terms
 A method for determining costs
 A model that combines forecasts and costs so that scheduling decisions can be made for the planning
period.

4.1.3 Aggregate Planning Strategies

The variables of the production system are labour, materials and capital. More labour effort is required to
generate higher volume of output. Hence, the employment and use of overtime (OT) are the two relevant
variables. Materials help to regulate output. The alternatives available to the company are inventories, back
ordering or subcontracting of items.

These controllable variables constitute pure strategies by which fluctuations in demand and uncertainties in
production activities can be accommodated by using the following steps:

 Vary the size of the workforce: Output is controlled by hiring or laying off workers in proportion to
changes in demand.
 Vary the hours worked: Maintain the stable workforce, but permit idle time when there is a slack and
permit overtime (OT) when demand is peak.
 Vary inventory levels: Demand fluctuations can be met by large amount of inventory.
 Subcontract: Upward shift in demand from low level. Constant production rates can be met by using
subcontractors to provide extra capacity.
  Change prices or other factors to influence demand
 Backlogs , backorder and stocks

Managers often combine reactive (workforce adjustment, anticipation of inventory, workforce utilization,
vacation schedules, subcontractors and Backlogs, backorder and stocks) and aggressive (complementary
products, and creative pricing) alternatives in various ways to arrive at an acceptable aggregate plan.

Three focused strategies are:

Chase Strategy: a strategy that matches demand during the planning horizon by varying either the workforce
level or the output rate. When a chase strategy uses the first method, varying the workforce level to match
demand, it relies on just one reactive alternative-workforce variation. This chase strategy has the advantage of
no inventory investment, overtime, or under-time. However it has some drawback, including the expense of
continually adjusting workforce levels, the potential alienation of the workforce, and the loss of productivity
and quality because of constant change in the workforce.

The second chase strategy, varying the output rate to match demand, opens up additional reactive alternatives
beyond changing the workforce level. Sometimes called the utilization strategy, the extent and timing of the
workforce’s utilization is changed through overtime, under- time and vacation are taken. Subcontracting,
including temporary help during the peak season, is another way of matching demand.

Level Strategy: a strategy that maintains a constant workforce level or constant output rate during the
planning horizon. When a level strategy used the first method, maintaining a constant workforce level, it
might consist of not hiring or laying off workers (except at the beginning of the planning horizon), building up
anticipation inventories to absorb seasonal demand fluctuations, using under-time in slack periods and
overtime up to contracted limits for peak periods.

When level strategy uses the second method, maintaining a constant output rate, it allows hiring and layoffs in
addition to other alternatives of first level strategy. The key to identifying a level strategy is whether the
workforce or output rate is constant.

Mixed Strategy: Strategies that consider and implements a full range of receive alternatives and goes beyond
a “Pure” chase or level strategy. Whether management chooses a pure strategy or some mix the strategy
should reflect the organizations environment and planning objectives.

Aggregate Planning Guidelines

The following are the guidelines for aggregate planning:

1. Determine corporate policy regarding controllable variables.

 2. Use a good forecast as a basis for planning.
3. Plan in proper units of capacity.
4. Maintain the stable workforce.
5. Maintain needed control over inventories.
6. Maintain flexibility to change.
7. Respond to demand in a controlled manner.
8. Evaluate planning on a regular base.

Aggregate Planning Strategies: Demand Options (Demand management is proactive strategy)

1. Influencing demand
 Using advertising or promotion to increase demand in low periods
 Using pricing differentials to shift demand from peak periods to off-peak periods
 Attempt to shift demand to slow periods
 May not be sufficient to balance demand and capacity
2. Back ordering during high- demand periods
 Requires customers to wait for an order without loss of goodwill or the order
 Orders are taken in one period and deliveries promised for a later period
 The success of this approach depends on how willing customers are to wait for delivery
 Most effective when there are few if any substitutes for the product or service
 Often results in lost sales, disappointed customers, and perhaps additional paperwork
3. Counter seasonal product and service mixing/New demand
 Develop a product mix of counter seasonal items
 May lead to products or services outside the company‘s areas of expertise

Aggregate Planning Strategies: Capacity/Supply Options

1. Changing inventory levels

 Increase inventory in low demand periods to meet high demand in the future
 Increases costs associated with storage, insurance, handling, obsolescence, and capital investment
15% to 40%
 Shortages can mean lost sales due to long lead times and poor customer service
2. Varying workforce size by hiring or layoffs
 Match production rate to demand
 Training and separation costs for hiring and laying off workers
 New workers may have lower productivity
  Laying off workers may lower morale and productivity
3. Varying production rate through overtime or idle time
 Allows constant workforce
 May be difficult to meet large increases in demand
 Overtime can be costly and may drive down productivity
 Absorbing idle time may be difficult
4. Subcontracting
 Temporary measure during periods of peak demand
 May be costly
 Assuring quality and timely delivery may be difficult
 Exposes your customers to a possible competitor
5. Using part-time workers
 Useful for filling unskilled or low skilled positions, especially in services

Aggregate Planning in Services

 Services occur when they are rendered

 Demand for service can be difficult to predict
 Capacity availability can be difficult to predict
 Labour flexibility can be an advantage in services
 Controlling the cost of labour is critical
 Accurate scheduling of labour-hours to assure quick response to customer demand
 An on-call labour resource to cover unexpected demand
 Flexibility of individual worker skills
 Flexibility in rate of output or hours of work

4.1.4 The Planning Process

Determining demand requirements: the first step in planning process is to determine the demand requirements
for each period of planning horizon. The planner can derive future requirements for finished goods from
backlogs (for make to order operations) or from forecasts for product families made to stock (for make to
stock operations).

Identifying alternatives, constraints, and costs: the second step is to identify the alternatives, constraints, and
costs for the plan.
Constraints represent the physical limitations or managerial policies associated with the aggregate plan.
Typically, many plans can satisfy specific set of constraints. The planner usually considers several types of
costs when preparing aggregate plans:

 Regular time costs (wages, health insurance, dental care, social security, and retirement funds pay
for vacation, holidays, and certain other types of absence).
 Overtime costs
 Hiring and layoff costs
 Inventory holding costs
 Backorder and stock out costs

Preparing an acceptable plan: developing an acceptable plan is an iterative process i.e. plan may need to go
through several revisions and adjustments. A prospective, or tentative, plan is developed to start. The plan
must then be checked against constraints and evaluated in terms of strategic objectives.

Implementing and updating the plan: the final step is implementing and updating the final plan.
Implementation requires the comment of manager in all functional areas. The planning committee may
recommend changes in the plan during implementation or updating to balance conflicting objectives better.
Acceptance of the plan does not necessarily mean that everyone is in total agreement, but it does imply that
everyone will work to achieve it.

4.1.5 Techniques for Aggregate Planning:

1. Graphical Techniques/Trial-and-Error Techniques

2. Mathematical Techniques

4.1.5.1 Graphical Techniques

 Popular techniques
 Easy to understand and use
 Trial-and-error approaches that do not guarantee an optimal solution
 Require only limited computations
 Total expected demand
Average requirement=
Number of production days

6200/124=50 units per day

4.1.5.2 Aggregate Planning with Mathematical Method

The large cost involved with aggregate plans is a motivation to seek the best possible plan. Several
mathematical methods can help with this search process.

Transportation method of production planning: the use of transportation method to solve production planning
problems, assuming that a demand forecast is available for each period, along with workforce level plan for
regular time. Capacity limits on over time and subcontractor production also are need for each period. The
other assumption is all costs are linearly related to the amount of goods produced –that is, a change in the
amount of goods produced creates proportionate change in costs. With these assumptions, the transportation
method yields the optimal mixed strategy production plan for the planning horizon.
Production planning with backorder:

We start with a table called tableau of the workforce level, capacity limits demand forecast quantities
beginning inventory level, and costs of each planning horizon.

Each raw in the tableau represents an alternative for supplying output. The columns represent the periods that
the plan must cover, plus the unused and total capabilities available. The box in the upper right hand side
corner of each cell shows the cost of producing a unit in one period and in some cases, carrying the unit in
inventory for sale in future period.

Use the following procedure to develop an acceptable aggregate plan

Step1: Select a workforce adjustment plan ( Rt values) using a chase strategy, level strategy, or a mixed
strategy. Identify the capacity constraints on overtime ( Ot values) and on subcontracting ( St values). Usually a
period’s overtime capacity is a per cent of its regular-time capacity. Also identify the no-hand anticipation
inventory (Io values) currently available before the start of the period.

Step 1: Select a workforce adjustment plan

Step 2: Input the cost parameters (h, r, c, s, u and b) for the different reactive alternatives

Step 3: Forecast the demand for each future period, and insert the forecasts as the values in the tableau’s last
row. The last period’s requirement should be increased to account for any desired inventory at the end of the
planning horizon. The unused capacity cell in the last raw equals the total demand requirements in the last
raw, minus the total capacity in tableau’s last column.

Step 4: Solve the transportation problem just formulated with a computer routine to find the optimal solution
(based on the workforce adjustment plan). The sum of all entries in a row equals the total capacity for that
raw, and the sum of all entries in a column must equal the requirement in the last column.

Step 5: Return to step 1 and try other staffing plans until you find the solution that best balances cost and
qualitative consideration.

Linear programming for production planning

Linear programming models for production planning seek the optimal production plan for a linear objective
function and a set of linear constraints; that is, there can be no cross products or powers of decision variables
or other types of nonlinear terms in the problem formulation. Liner programming models can be used to
determine optimal inventory level, backorders, subcontractor quantities, production quantities overtime
production, hires and layoffs. The main drawbacks are that all relationships between variables must be linear
and that the optimal values of the decision variables may be fractional.

Option Advantages Disadvantages Some Comments

Changing Changes in human Inventory holding cost may Applies mainly to

inventory resources are gradual or increase. Shortages may production, not
levels none; no abrupt result in lost sales. service, operations.
production changes.

Varying Avoids the costs of other Hiring, layoff, and training Used where size of labor
workforce alternatives. costs may be significant. pool is large.
size by hiring
or layoffs

Varying Matches seasonal Overtime premiums; tired Allows flexibility within

production fluctuations without workers; may not meet the aggregate plan.
rates through hiring/ training costs. demand.
overtime or
idle time

Sub- Permits flexibility and Loss of quality control; Applies mainly in

contracting smoothing of the firm’s reduced profits; loss of future production settings.
output. business.

Using part- Less costly and more High turnover/ training costs; Good for unskilled jobs
time workers flexible than full-time quality suffers; scheduling in areas with large
workers. difficult. temporary labor pools.

Influencing Tries to use excess Uncertainty in demand. Hard Creates marketing ideas.
demand capacity. Discounts to match demand to supply Overbooking used in
draw new customers. exactly. some businesses.
 Back ordering May avoid overtime. Customer must be willing to Many companies back
during high- Keeps capacity constant. wait, but goodwill is lost. order.
demand
periods

Counter- Fully utilizes resources; May require skills or Risky finding products
seasonal allows stable workforce. equipment outside the firm’s or services with
product and areas of expertise. opposite demand
service patterns.
mixing

Master Scheduling

The Master Production Schedule (MPS) formalizes the production plan and translates it into specific
end-item requirements over a short to intermediate planning horizon. The end items are then exploded into
specific material and capacity requirements by the Material Requirements Planning (MRP) and Capacity
Requirements Planning (CRP) systems. Thus, the MPS essentially drives the entire production and inventory
system.

The major inputs to the master production schedule are:

1) Forecasts of demand, e.g., of end items and service parts.

2) Customer orders, i.e., including any warehouse and interplant needs.
3) Inventory on-hand from the previous period.

Forecasts of demand are the major input for make-to-stock items. However, to be competitive, many make-to-
order firms must anticipate orders by using forecasts for long lead-time items and by matching the forecasts
with customer orders as the orders become available.

4.4 Scheduling (Production Activity Control)

4.4.1 Concepts of Scheduling

What Is scheduling?

Scheduling is the processes of determining the starting and completion times to jobs. It is the determination of
when labour, equipment and facilities are needed to produce a product or provide a service. Scheduling is a
time table for: performing activities, using resources, or allocating facilities. Generally, a schedule specifies
the timing and sequence of production.

Schedule must be realistic; that is they must be capable of being achieved within the capacity limitations of the
manufacturing facilities.

Scheduling should be clearly differentiated from aggregate planning. The purpose of scheduling is to ensure
that available capacity is efficiently and effectively used to achieve the organization’s objectives. The purpose
of aggregate planning is to determine the resources (labour, equipment, space etc.) that should be acquired for
scheduling.

Often several jobs might be processed at one or more work stations. Typically a variety of tasks can be
performed at each work station which make effective scheduling a must rather than an alternative. Sequencing
& loading should be considered during scheduling activity.

Sequencing: sequencing is concerned with developing an exact order (or sequence) of job processing. It is the
determination of the order in which jobs are processed. One of the oldest sequencing methods is the Gant
chart. Gantt charts are named after Henry Gantt, who developed these charts in the early 1900s. A Gantt chart
is a visual representation of a schedule over time. Two kinds of Gantt charts are the load chart and the
progress chart. Load chart is a chart that visually shows the workload relative to the capacity at a
resource whereas progress chart a chart that visually shows the planned schedule compared to actual
performance. Gant chart is a bar chart that shows a job’s progress graphically or compares actual against
planned performance.

Loading: is the assignment of work/jobs to process centers (specific resources/ machines). It is simply the
process of assigning work to individual workers or machine. Loading can be: finite loading, infinite loading,
back ward loading and forward loading.

Infinite loading: scheduling that calculates the capacity needed at work centers in the time period
needed without regard to the capacity available to do the work. Manufacturing companies can use infinite
loading according to a proposed master production schedule (MPS). A service organization like a law firm can
use infinite loading to identify the resources needed to complete the proposed case load. Infinite loading
identifies uneven workloads and bottlenecks.

Back ward loading begins with the due date for each job and loads the processing time requirements against
each work centre by proceeding back ward in time. The purpose of back ward loading is to calculate the
capacity required in each work centre for each time period.
Finite loading: scheduling that loads work -centres up to a predetermined amount of capacity. Finite loading
is an operational schedule with start and finish times for each activity. It does not allow you to load more
work than can be done with the available capacity. The finite loading schedule shows how a company plans
to use available capacity at each work center. In a manufacturing company, the schedule shows the jobs
to be done at a particular work center if the work center uses a set number of production hours each day.

Companies benefit from both infinite and finite loading. Infinite loading identifies resource bottlenecks for
a proposed schedule so that planners can find solutions proactively, such as changing the schedule
and increasing the resource capacity. Finite loading develops the operational schedule that uses the
available capacity. Finite and infinite loading assign work to specific work centers based on a proposed
schedule. Both techniques use either a schedule (infinite loading) or a prioritized list of jobs to be done (finite
loading).

Forward loading begins with the present date and loads jobs forwards in time. The processing time is
accumulated against each work centre, assuming infinite capacity. The purpose of forward loading is to
determine the approximate completion date of each job and the capacity required in each time period.

Objectives of scheduling

The objectives of scheduling includes minimizing: job lateness, response time, completion time, overtime, idle
time, work in process inventory, and maximizing machine and labour utilization.

Scheduling is common for manufacturing as well as service sectors.

4.4.2 Scheduling in manufacturing

Scheduling in manufacturing is the process of assigning priorities to manufacturing orders and allocating
workloads to a specific work centers. Scheduling is challenging if the task variety is high; example in this case
is job shop scheduling. In the following discussion, we will concentrate on scheduling issues for job shop
production.

Job shop scheduling

For job shop production scheduling decision can be quite complex. What makes scheduling so difficult in a
job shop is the variety of jobs (customer orders) that are processed, each with distinctive routing & processing
requirement. In a pure job shop, there are several jobs to be processed, each of which may have different
routing among department or machines in the shop. In designing a scheduling and control system for a high
variety of activities, sequencing and prioritizing should be emphasized.
Priority rules for allocating jobs to machine- sequencing

As discussed above, sequencing is prioritizing jobs that have been assigned to limited resources. Sequencing is
simple if work centers are lightly loaded and need the same processing time. But if work centers are heavily
loaded there will be longer waiting time and idle time. In this case to minimize the waiting and idle time, we
must prioritize the tasks by using priority rules.

Priority rules are the criteria by which the sequence of jobs is determined. The process of determine which job
is started first on a particular machine or work centre is known as priority sequencing. Some of the more
common priority rules for sequencing jobs are:

 First come, first serve (FCFS): orders are run in the order that they arrive in the department i.e. the
oldest first rule.
 Shortest processing time (SPT): run the job with the shortest completion time first i.e. shortest
operating time first.
 Earliest due date first (due date-EDD): run the job with earliest due date first. Thus, a job that is due
tomorrow has a higher priority than the job that is due next week or next month.
 Critical ratio (CR): this is calculated as the difference between the due date and the current date
divided by the work remaining. Orders with the smallest CR are run first. In the CR rule, jobs are
sequenced from lowest CR to highest CR. Those with a CR less than one are considered behind
schedule and need to be expedited. And CR greater than one implies that the job is ahead schedule and
can be de-expedite.

due date−toda y ' sdate time remaining

CR= =
Total shop time remaining lead timeremaining

 Last come first serve (LCFS): this rule occurs frequently by default. As orders arrive they are placed
on the top of the stack and the operator usually picks up the order on top to run first.
 Random order – whim (urge): the supervisors or the operators usually select which ever job they feel
like running.
 Queue ratio (QR): this is calculated as the slack time remaining in the schedule divided by the
planned remaining queue time. Orders with the smallest QR are run first.
 Slack time remaining (STR): This is calculated as the difference between the times remaining before
the due date minus the processing time remaining. Obviously, job with negative slacks are behind
schedule; those jobs might require expediting to get caught up. Under the minimum slack rule, jobs
are sequenced based on their slack: those with the most slack receive the lowest priority and those with
the least slack receive the highest priority i.e. Orders with the shortest STR are run first.
 Slack time remaining per operation(STR/OP):

Time remaining before due date−remaining processingtime

STR/ OP=
number of remaning operations

Assumptions of priority Rules

 The set of job is known, no new jobs arrive after processing begins and no jobs are
cancelled..
 Set up time is independent of processing sequence
 Set up time is deterministic
 Processing times are deterministic rather than variable
 There will be no interruptions in processing such as machine breakdowns, accidents or
worker illness
Performance measures of job shop scheduling
From the operations manager’s perspectives, identifying performance measures to be used in selecting
a schedule is important. If the overall goals of the organizations are to be achieved the schedule should
reflect managerially acceptable performance measure. The following describes the most common
performance measure used in operation schedule.
 Job flow time: refers to the time a job spends in the shop. It is the sum of the moving time between
operations, waiting time for machines or work orders, process time (including set up), and delays
resulting from machine breakdowns, component unavailability and the like. The objective here is
to minimize the average flow time.
Flow time = waiting time + processing time
Average flow time = (sum of total flow time) ÷ (numbers of job processed)
 Make span time: refers to time to process a set of jobs. It is the total amount of time required to
complete a group of job. The general objective is to minimize the make span time.
(Generally, make span time =£processing time of each job)
 Tardiness (past due): refers to the amount by which completion time exceeds the due date of a
job. If a job is completed before its due date, tardiness is zero. The objective is to minimize the
number of tardy jobs.
Tardiness= £past due, and
Average tardiness = £times past due ÷ total numbers of jobs
 Work in process inventory: any job in waiting line, moving from one operation to the next, being
delayed for some reason, being processed and the like are work in process. This measure can be
expressed in units, number of jobs, and birr value for the entire system and so on.
 (Average WIP inventory =£job flow times ÷ make span times)
 Total inventory in the system: is the sum of the schedule receipt and on hand inventories.
(Average total inventory = £ jobs in the system ÷ make span time)
 Utilization = total processing time ÷ total flow time
£ ( no of jobs ) ( production time of the job )
Average number of jobs∈the system=
make span time

Job shop scheduling techniques and priority rules.

There are a number of job scheduling techniques. However, we will take the most widely practiced job
scheduling techniques: scheduling ‘n’ jobs – one machine problems.

Scheduling n Jobs on one Machine (n/1cases).

Let us compare some of the priority rules in a static scheduling situation involving some jobs and one
machine. The theoretical difficulty of this type of problem increases as more machines are considered.

Example: processing time (including set up times) and due dates for six jobs waiting to be processed
at work center are given in the following table.

Determine the sequence of jobs, average flow time, average tardiness and average number of jobs at
the work center for each of these rules.

A. FCFS B. SPT C. EDD D. CR

Job Processing Time (Days) Due Date (Days)

A 2 7
B 8 16
C 4 4
D 10 17
E 5 15
F 12 18
Assume jobs arrived in the order shown.

Solution
4.4.3 Scheduling in Services

Scheduling is also important in service organizations. For example nurses must be scheduled in hospital, and
truck must be scheduled for deliveries for furniture distributors. One important distinction between
manufacturing and services that affects scheduling is that service operations cannot create inventories to buffer
demand uncertainties. A second distinction is that in service operations demand often is less predictable;
customers may decide on the spur of the moment that they need a hamburger, a haircut or a plumbing repair.
Thus capacity, often in the form of employees is crucial for service providers. In this section we discuss
various ways in which schedule systems can facilitate the capacity management of service providers.

Scheduling customer demand

One way to manage capacity is to schedule customers for arrival times and definite periods of service time.
With this approach, capacity remains fixed and demand is leveled to provide timely service and utilize
capacity. Three methods are commonly used: appointment, reservation and backlog.

Appointment: an appointment system assigns specific times for services to customers. The advantages of this
method are timely customer service and high utilization of servers. Doctors, dentists, lawyers, and automobile
repair shops are examples of service providers that use appointment systems. Doctors can use the system to
schedule parts of their days to visits hospital patients and lawyers can set aside time to prepare cases. If timely
service is to be provided, however, care must be taken to tailor the length of appointment to individual
customer needs rather than merely scheduling customers at equal time interval.

Reservation: reservation system, although quite similar to appointment systems, are used when the customer
actually occupies or uses facilities associated with the service. For example, customer reserve hotel rooms,
automobiles, airline seats, and concert seats. The major advantage of reservation system is the lead time they
give service managers to plan the efficient use of facilities. Often, reservation requires some form of down
payment to reduce the problem of no-shows.

Backlog: a less precise way to schedule customers is to allow backlogs to develop; that is customers never
know exactly when service will commence. They present service request to an order taker, who adds it to the
waiting line of orders already in the system. TV repair shops, restaurants, banks, grocery stores, and barber
shops are examples of the many types of business that uses this system. Various priority rules can be used to
determine which order to process next. The usual rule is first come, first served, but if the order involves
rework on a previous order, it may get a higher priority.
Scheduling the worker:

Another way to manage capacity with a schedule system is to specify the on duty and off duty periods for each
employee over a certain time period as in assigning postal clerks, nurses, pilots, attendants, or police officers
to specific work days and shifts. This approach is used when customers demand quick response and total
demand can be forecasted with reasonable accuracy. In this instant capacity is adjusted to meet the expected
loads on the service system. The work force capacity available each day must meet or exceed daily work
force requirements. If it does not, the scheduler must try to rearrange days off until the requirements are met.
If no such scheduling can be found, management might have to change the staffing plan and authorize more
employees, over time hours or large backlogs.

Managers usually use rotating schedule than fixed schedule to assign workers on their duty. In rotating
schedule rotate employees through a series of work days or hours. Thus over a period of time, each person has
the same opportunity to have weekends and holidays off and to work days, as well as evening and nights. A
rotating schedule gives each employee the next employee‘s schedule the following week. In contrast, a fixed
schedule calls for each employee to work the same days and hours each week.