Integrated Planning of Production and Engineering Process Improvement

The authors present a planning model to allocate equipment capacity between production that generates immediate revenue and engineering process improvement activity that results in increased future output. The benefit of engineering activity is modeled as a concave function of the total number of engineering lots processed to date, while the production facility is represented by a nonlinear clearing function capturing the nonlinear relationship between resource utilization and cycle time. We analyze the model to develop structural results and illustrate its behavior with numerical examples.