Congestion and complexity costs in a plant with fixed resources that strives to make schedule

Abstract

In a firm that makes schedule, orders are always processed within a fixed time frame. In a congested facility, such a situation would be impossible using conventional queuing logic. We propose a conceptual model of a firm in which workers make schedule by rushing jobs, if necessary, with potential quality consequences. Hence, time and quality are substitutes, a feature that we recognize explicitly in our definition of the firm's capacity. Production yields are not exogenous parameters but endogenously determined by workers responding to schedule pressures. The plant manager can authorize overtime to relieve this pressure or live with the quality consequences of rushing. The model reveals the..