Cooperative and Noncooperative Games for Capacity Planning and Scheduling

Abstract

This tutorial provides an overview of cooperative and noncooperative games for capacity planning and scheduling decisions. For both cooperative and noncooperative games, we present some basic definitions and concepts, review the recent literature, and discuss our own current research. The discussion of the literature of cooperative games includes sequencing games, models of outsourcing operations, and economic lot-sizing and schedule planning games. Our research considers a combined capacity planning and scheduling problem where a supplier allocates capacity to distributors, who may then cooperate to share their capacity allocations and resubmit revised orders. The discussion of the literature of noncooperative games includes capacity allocation mechanisms based on order sizes and sales, incentives for truth telling, models of decentralized versus centralized decision making, and auction mechanisms for capacity allocation. Our research develops an auction mechanism to allocate capacity to various agents with jobs that can be scheduled profitably; depending upon the choice of market good in the auction, there may be some flexibility in converting the allocated capacity into a feasible schedule. We also provide a discussion of future research directions, where we identify several issues that can be studied using new cooperative and noncooperative games.