The Nonstationary Staff-Planning Problem with Business Cycle and Learning Effects

Abstract

AboutSectionsView PDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareShare onFacebookTwitterLinked InEmail Go to Section HomeManagement ScienceVol. 47, No. 6 The Nonstationary Staff-Planning Problem with Business Cycle and Learning EffectsEdward G. Anderson, Jr.Edward G. Anderson, Jr.Published Online:1 Jun 2001https://doi.org/10.1287/mnsc.47.6.817AbstractManaging highly skilled employees is extremely complex because of the need to balance the costs and time lags associated with their training against the need to meet demand as quickly as possible. Unlike previous approaches to this problem in the staffing literature, this paper develops an optimal staffing policy at the strategic level to cope with nonstationary stochastic demand for a staff characterized by unproductive apprentice employees and fully productive experienced employees. The paper then explores the implications of this policy in different industries, using empirical data. Aside from the optimal policy, this paper's primary results include: (1) demand volatility reduces average productivity, most especially under conditions of low (or slightly negative) growth and—nonintuitively—low employee turnover or knowledge obsolescence rates; (2) there is a trade-off between meeting demand and high productivity; (3) firms with longer business cycles should smooth their hiring and firing policies; and (4) firms in industries with longer training times should smooth their hiring and firing policies. The paper also explores the possible rewards from reducing training times and turnover rates. Finally, it discusses managerial implications and possible future directions in research. Previous Back to Top Next FiguresReferencesRelatedInformationCited byWorkforce capacity planning with hierarchical skills, long-term training, and random resignations29 December 2021 | International Journal of Production ResearchOptimizing the Labor Strategy of a Professional Service FirmIEEE Transactions on Engineering Management, Vol. 66, No. 3Aging effects in public policy making30 September 2019 | System Dynamics Review, Vol. 35, No. 3Project and Resource Optimization (PRO) for IT Service Delivery29 December 2018An uncertain workforce planning problem with job satisfaction9 May 2016 | International Journal of Machine Learning and Cybernetics, Vol. 8, No. 5Erratum to ‘Inventory record inaccuracy: Causes and labor effects’18 March 2016 | Journal of Operations Management, Vol. 42-43, No. 1Workforce agility in operations managementSurveys in Operations Research and Management Science, Vol. 20, No. 2Inventory record inaccuracy: Causes and labor effects31 July 2015 | Journal of Operations Management, Vol. 39-40, No. 1Introduction to the Use of Linear Programming in Strategic Health Human Resource Planning15 June 2015An Overview of Industry Practice and Empirical Research in Retail Workforce ManagementDynamics of judicial service supply chainsJournal of Business Research, Vol. 67, No. 7Managing the supply and demand uncertainty in workforce recruitment: planned or just-in-time acquisition21 December 2017 | Journal of the Operational Research Society, Vol. 64, No. 11The Role of Operations Management Across the Entrepreneurial Value Chain20 January 2013 | Production and Operations Management, Vol. 22, No. 6A business dynamics model in entrepreneurial orientation for employeesIndustrial and Commercial Training, Vol. 45, No. 1Knowledge Life Cycle, Knowledge Inventory, and Knowledge Acquisition StrategiesSSRN Electronic JournalKnowledge Life Cycle, Knowledge Inventory, and Knowledge Acquisition StrategiesDecision Sciences, Vol. 41, No. 1Stochastic Optimal Control for Staffing and Backlog Policies in a Two-Stage Customized Service Supply Chain5 January 2009 | Production and Operations Management, Vol. 15, No. 2A general strategic capacity planning model under demand uncertaintyNaval Research Logistics, Vol. 53, No. 2A Hierarchical Product Development Planning Framework5 January 2009 | Production and Operations Management, Vol. 14, No. 3The “physics” of capacity and backlog management in service and custom manufacturing supply chainsSystem Dynamics Review, Vol. 21, No. 3 Volume 47, Issue 6June 2001Pages 735-879 Article Information Metrics Information Received:June 06, 1999Published Online:June 01, 2001 © 2001 INFORMSCite asEdward G. Anderson, Jr., (2001) The Nonstationary Staff-Planning Problem with Business Cycle and Learning Effects. Management Science 47(6):817-832. https://doi.org/10.1287/mnsc.47.6.817 KeywordsStaff PlanningLearningCapacity PlanningKnowledge ManagementProduct DevelopmentSystem DynamicsControl TheoryStochastic Dynamic ProgrammingPDF download