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In this paper, a novel mixed-integer programming model is developed to optimally assign the die sets to candidate plants to minimize the total costs. The total costs include freight shipping stamped parts to assembly plants, die set movement, outsourcing, and utilization. Therefore, the objective function is weighted multi-criteria and it takes into consideration some of the key constraints in the real-world condition including “must-move die sets”. An optimization tool has been developed that takes several inputs and feeds them as the input to the mathematical model and generates the optimal assignments with the directional costs as the output. The tool has been tested for several plants at Ford and has proved its robustness by saving millions of dollars. The developed tool can easily be applied to other manufacturing systems and original equipment manufacturers (OEMs).

Capacity planning is one of the major factors in saving capital and avoiding unnecessary costs in any manufacturing system particularly large original equipment manufacturers (OEMs). However, many manufacturing systems still suffer from huge costs incurred due to a lack of applying a robust capacity planning optimization model. Most of the developed models in literature do not consider real-life situations in manufacturing systems and, hence, are not easy to implement. In this paper, a novel capacity planning optimization model considers various important features of a manufacturing system. The objective function of the model is to minimize the weighted sum of the total number of assets and changeovers. A unique feature of the developed model is the capability of providing the number of additional required assets of each type in case the existing assets are not capable of covering the entire demand.