Order scheduling with controllable processing times, common due date and the processing deadline

Due date quotation and scheduling are important tools to match demand with production capacity in the MTO (make-to-order) environment. We consider an order scheduling problem faced by a manufacturing firm operating in an MTO environment, where the firm needs to quote a common due date for the customers, and simultaneously control the processing times of customer orders (by allocating extra resources to process the orders) so as to complete the orders before a given deadline. The objective is to minimize the total costs of earliness, tardiness, due date assignment and extra resource consumption. We show the problem is NP-hard, even if the cost weights for controlling the order processing times are identical. We identify several polynomially solvable cases of the problem, and develop a branch and bound algorithm and three Tabu search algorithms to solve the general problem. We then conduct computational experiments to evaluate the performance of the three Tabu-search algorithms and show that they are generally effective in terms of solution quality.