Overtime usage in a job shop environment

Problems are encountered in a job shop which has a fixed capacity if the total work content of the jobs passing through the shop increases sufficiently. Even the use of effective priority dispatching rules and/or expediting does not adequately shorten the queues which develop if the total work content continually exceeds shop capacity. To avoid losing job orders because the orders are unduly delayed, the job shop might resort to overtime usage. This study examines the efficient and economic use of overtime to relieve the backlog problem and uses overtime as the basic criterion for evaluation of overtime usage. The study employs GPSS V programming language to simulate a hypothetical job shop. The shop is loaded to various proportions of its normal capacity and various levels of overtime are tested. Findings show that overtime should not be assigned indiscriminately but rather should be based on a shop's unique conditions of overtime cost, the priority rule being employed, and the level of capacity utilization. Marginal benefit-cost ratio curves are developed to determine whether overtime usage is economically reasonable. These curves may also be used to determine the maximum or limiting amount of overtime to use under specific shop conditions.