Workforce Planning and Facility Utilization using Two-Stage Stochastic Recourse

Hi-tech manufacturing uses sophisticated and capital intensive processes that require a highly skilled workforce. Fluctuating demand leads to either a shortage of skilled workers that causes unmet demand or an excess of skilled labor that causes worker idleness. This mismatch in the available and required skillsets is a source of potential loss for the organization. This paper formulates an industry motivated workforce planning and facility utilization problem as a two-stage stochastic recourse program that considers fluctuating demand over a long planning horizon and includes business and labor rules, e.g., hiring, firing, overtime, cross-training, and shift swapping, that govern the structure of the workforce. Solutions to this problem are computed using a scenario-based approach and indicate that the cost of workforce formation can be significantly reduced using the recourse problem.