Abstract
The aim of this paper is to introduce a model for temporary staffing when temporary employment is managed by firm contracts and to propose a simulated annealing‐based method to solve the model. Temporary employment is a policy frequently used to adjust the working hour capacity to fluctuating demand. Temporary workforce planning models have been unnecessarily simplified to account for only periodic hiring and laying off; a company can review its workforce requirement every period and make hire‐fire decisions accordingly, usually with a layoff cost. We present a more realistic temporary workforce planning model that assumes a firm contract between the worker and the company, which can extend to several periods. The model assumes the traditional constraints, such as inventory balance constraints, worker availability, and labor hour mix. The costs are the inventory holding cost, training cost of the temporary workers, and the backorder cost. The mixed integer model developed for this case has been found to be difficult to solve even for small problem sizes; therefore, a simulated annealing algorithm is proposed to solve the mixed integer model. The performance of the SA algorithm is compared with the CPLEX solution.
Highlights
Temporary employment has been advocated as a means of flexible employment by which companies can effectively adjust the workforce level when faced by fluctuating demand 1, 2
We offer an alternative formulation of the traditional temporary manpower planning model with fixed contract duration that can extend to several time periods
This paper proposes a more realistic temporary workforce planning model that assumes an extended contract duration
Summary
Temporary employment has been advocated as a means of flexible employment by which companies can effectively adjust the workforce level when faced by fluctuating demand 1, 2. The contract covers the training period, which typically lasts for a small fraction of the duration of the contract These PC assembly companies hire workers with technical college degrees, who are skilled in the technical matters of assembly of electronic components and wiring. Traditional periodic workforce review models permit planners to adjust the workforce level every period, with the flexibility to hire temporary workers without long-term commitment; in most cases, a layoff cost is incurred. This flexibility may not always be available to a company; laws, as explained above, or the company’s own policies may impose fixed-term contracts. We offer an alternative formulation of the traditional temporary manpower planning model with fixed contract duration that can extend to several time periods
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