Capacity planning strategies for an IT service firm with skilled workforce
by Tian He; HongXun Jiang
International Journal of Advanced Mechatronic Systems (IJAMECHS), Vol. 3, No. 5/6, 2011

Abstract: This paper considers capacity planning strategies problem for an IT service firm that has to make capacity expansion decisions, such as equipment procurement, staff recruitment and skills training, to meet a demand growth which is known over finite horizon with minimum expected total cost. Unlike traditional manufacturing operations, the delivery capacity of the IT service firm which is one of the modern service organisations is not only dependent on the quantity and technology level of equipment but also largely dependent on the quantity and skills of human resources. The typical capacity expansion literature has focused on the expansion of equipment capacity, but ignoring the workforce aspect. On the other hand, the manpower literature has only focused on staffing decisions. This paper attempts to unify the two streams of research by developing a general model that considers capacity expansion with a variety of technical equipment and human resources with different skills. The factors of variable lead times, training periods and economics of scale are considered. A genetic algorithm (GA) is applied to solve the non-linear integer programming model. The computational results suggest that the model works well and prove the effectiveness of the algorithm.

Online publication date: Wed, 18-Mar-2015

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