An Experimental Comparison of Time-Based and Economic-Based Scheduling Methods to Maximize Net Present Value*

In the past, performance in dynamic-scheduling environments was primarily measured in terms of time or physical shop characteristics. Objectives such as mean tardiness, flow time, and work-in-process inventory were commonly used. Today, there is increasing interest in the use of more advanced economic performance measures. These measures have the more comprehensive objective of maximizing ownership wealth by economically scheduling jobs and tasks. This study presents a large-scale experiment testing time-based and economic-based scheduling methods in a dynamic job shop. These methods are evaluated on their ability to maximize net present value (NPV). The study considers the just-in-time (JIT) delivery environment. The job shop is hypothetical, but is based on models of real production situations. Results show that the use of very detailed economic information in a sophisticated manner generally improves economic performance. Where due dates are easy to achieve, however, time-based scheduling methods are at least as good as those based on economics. Also, where utilization is high and due dates tight, early cost information in release and dispatch is detrimental to schedule value.