Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/1846
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Title: Scheduling with subcontracting options
Authors: Chen, ZL
Li, CL 
Issue Date: Dec-2008
Source: IIE transactions, Dec. 2008, v. 40, no. 12, p. 1171-1184
Abstract: Motivated by a problem commonly faced by time-sensitive product manufacturers, an analytical model to study the joint decisions of subcontracting and detailed job scheduling is proposed. In the proposed model, a manufacturer operates in a make-to-order fashion and receives a set of orders from its customers at the beginning of the planning horizon. The orders can be either processed by the manufacturer in-house or subcontracted to one of several available subcontractors, possibly at a higher cost. The manufacturer needs to determine which orders should be produced in-house and which orders should be subcontracted. Furthermore, it needs to determine a production schedule for the orders to be produced in-house. The objective is to minimize the total production and subcontracting cost, subject to a constraint on the maximum completion time of the orders. We analyze the computational complexity of the model, develop a heuristic for solving it and analyze worst-case and asymptotic performances of the heuristic. We also study the value of subcontracting by comparing our model and a model where no subcontracting option is available to the manufacturer. Computational results demonstrate that the subcontracting option gives the manufacturer a significant performance improvement. Related managerial insights are also provided.
Keywords: Scheduling
Subcontracting
Computational complexity
Worst-case analysis
Asymptotic analysis
Publisher: Taylor & Francis
Journal: IIE transactions 
ISSN: 0740-817X
EISSN: 1545-8830
DOI: 10.1080/07408170801975057
Rights: © 2008 “IIE”.
This is an electronic version of an article published in Z.-L. Chen and C.-L. Li (2008), IIE Transactions, 40(12), 1171-1184. IIE Transactions is available online at: http://www.informaworld.com, the open URL of the article: http://www.informaworld.com/openurl?genre=article&issn=0740-817X&volume=40&issue=12&spage=1171.
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