Production planning with resources subject to congestion

A fundamental difficulty in developing effective production planning models has been accurately reflecting the nonlinear dependency between workload and lead times. We develop a mathematical programming model for production planning in multiproduct, single stage systems that captures the nonlinear dependency between workload and lead times. We then use outer linearization of this nonlinear model to obtain a linear programming formulation and extend it to multistage systems. Extensive computational experiments validate the approach and compare its results to conventional models that assume workload‐independent planning lead times. © 2009 Wiley Periodicals, Inc. Naval Research Logistics, 2009