An efficient method to reduce relative capacity shortage using annualised hours planning

Abstract

Annualised hours (AH) is a method for meeting seasonal demand which involves irregular distribution of working hours. This paper considers an AH scenario where different category of workers are contracted to work for a certain number of hours per year and each category has different efficiencies for different types of task. The number of workers required is estimated based on the forecasted hours considering the same efficiency for all types of task by a worker. In a number of cases, tasks are too difficult to be performed by temporary workers. In situations where overtime or hiring temporary workers are not considered, capacity shortage is possible during certain weeks as a result of the relative efficiency. The relative capacity shortage, which is defined as the capacity shortage related to the required capacity, has to be minimised. This paper proposes an AH planning problem using linear programming model to minimise relative capacity shortage in which workers are considered to be cross trained. The computational demonstration shows the effectiveness of the model.