Project scheduling approach to production planning

We suggest a novel approach to modelling and solving production planning (PP) problems in make-to-order production environments. This approach unifies the capacity and the material flow oriented aspects of PP. Orders are modelled as projects that compete for limited resources. The projects consist of networks of variable-intensity activities which may require several resources at the same time. The goal is to generate production plans that satisfy all the temporal and resource constraints and minimize additional or external resource usage over the planning horizon. The model is applicable at different aggregation levels of PP, as we show with two real-life case studies. Although the capacity and material flow aspects of PP are coupled, a special solver developed for the project model efficiently solves problems of real-life sizes.