A conceptual approach for managing production in consideration of shifting electrical loads

Abstract The key concept of the smart grid is demand response for power consumption comprising actions taken by customers to reduce or shift electrical loads temporarily in response to requests from electric service providers. A demand response program offers time-based rates that allow customers to choose whether to adjust their consumption. In the manufacturing sector, production managers are likely to participate in a demand response program if they can schedule their production operations in response to electricity prices at peak times. The drum–buffer–rope (DBR) scheduling system in the theory of constraints (TOC) is a useful production operation method because it helps managers focus on effectively managing capacity based on the critical constraint that limits performance of the system. This paper presents a conceptual approach to managing production in consideration of shifting electrical loads in an effort to deal with the most expensive hours of the day. A DBR-based operation model is developed to determine the running time of production processes depending on power saving vs. throughput loss. Conceptual cases are prepared to demonstrate how a production manager can shift electrical loads in response to electricity prices.