International journal of Innovative Research in Management ISSN 2319 – 6912

(March 2014, issue 3 volume 3)

Approach of Capacity Planning Through Linear Programming Technique:

A Practice in Textile Enterprise

Ayhan YALÇINSOY 1 Mustafa ZİNCİRKIRAN2 Hidayet TİFTİK3

1 Dicle University, Diyarbakır, Türkiye

PhD Student in Dicle University

2 Dicle University, Diyarbakır, Türkiye

Assistant Professor in Dicle University

3 Turgut Ozal University, Ankara, Türkiye,

PhD Lecturer in Turgut Ozal University
ABSTRACT

This study aims to put forth the benefits of linear programming technique, which is one of
the quantitative decision-making techniques, for the most efficient use of established
business capacities. In order to achieve this aim, capacity planning is carried out in a textile
enterprise in Istanbul.
A market limitation model is developed for optimum use of capacity on the basis of the
enterprise’s data of the last three years. According to the model, it is determined that the
cutting, ironing and packaging units of the enterprise operate with idle capacity and provide
a profit of 29,618,370 Euros. However, a new model has been developed and analyzed in
order to ensure that the enterprise manufactures its own products, which are mainly sewed
by contract manufacturing. According to the proposed model, it is seen that the enterprise
has doubled its profit by increasing it to 57,905,430 Euros.

Keywords: Linear Programming, Capacity Planning

Corresponding Author: Ayhan YALÇINSOY

INTRODUCTION
Today’s rapidly developing technology and global competition atmosphere has turned to a
threat on the assets of enterprises. In order to survive in this atmosphere, enterprises are
obliged to use their capacities at the optimum level. In this regard, enterprises should use
scientific methods both in the stage of foundation and in their new capacity plans and select
the best capacity level. Capacity, which have an influence on the structure of costs,
efficiency of resources, level of technology used, stocks and requirements of labor force
should be capable of meeting the current and future needs.

In capacity planning, managers should discuss the factors that have an impact on the internal
and external capacity. Particularly the successive systems should be operated in compliance
with their capacities. In this extent, it is important to eliminate the straits among systems
and make idle capacities usable. Linear programming method, which is one of the digital
decision-making techniques, is also used in the determination of such straits and idle
capacities.

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Enterprises carry out their productions in frame of a certain plan and schedule in order to
efficiently use their resources and increase their profits. Linear programming technique is
one of the methods used in the solution of the problems of production planning or capacity
planning. Effective use of time and achievement of optimum capacity level are important in
terms of business administration today.

In this research, it is attempted to make a capacity planning through linear programming

technique by using a textile enterprise’s data of the last four years. According to the model, it
is determined that the cutting, ironing and packaging units of the enterprise operate with idle
capacity and provide a low profitability. In this regard, a new model has been developed and
analyzed in order to ensure that the enterprise manufactures its own products, which are
mainly sewed by contract manufacturing. According to the proposed model, it is seen that
the enterprise has doubled its profitability. Moreover, the local and foreign researches about
linear programming are reviewed and evaluated in this research.

1. CAPACITY PLANNING

Capacity is a concept corresponding to the quantity of goods that an enterprise is capable of

producing, number of passengers that a ferry is capable of transporting, working hours of a
worker, number of units produced by a machine etc. (Tekin, 2012:223). Production capacity
of an enterprise is the production quantity that the enterprise is capable of realizing by using
the available production factors in a rational manner within a certain period of time
(Güneçıkan, 2008:2). Capacity planning begins in the foundation stage of an enterprise and
requires persistence. Decisions of capacity planning consist of the following activities
(Bulut, 2004);
a. Determination of the current capacity level
b. Estimation of the future capacity level
c. Determination of the factors that may influence capacity
d. Financial, economic and technological evaluation of capacity alternatives
e. Selection of the capacity that fits the purposes of the enterprise

The concept of capacity is evaluated in two stages in the short and long term. In the short
term, enterprise managers make a prediction about the capacity level to be achieved by
carrying out production with all available production factors (Tekin, 1997:9). Amounts of
production factors required for current and future capacity level may be calculated. In the
long term, it is considerably difficult to determine the amount of production factors required
for the target capacity level due to the uncertainties in technology and market (Tekin,
2012:226).
1.1. Types of Capacity
Oluç defines capacity as the power of an enterprise to produce goods and services
(Ekodialog.com, 2009). Theoretic Capacity, Practical Capacity, Actual Capacity and
Optimum Capacity are the most commonly used types of capacity.

Theoretic capacity is the maximum output that the machines and equipment used for
production in an enterprise is capable of producing by means of qualified labor force (Tekin,
1997:13). On the other hand, Yıldıztekin defines theoretic capacity as the maximum product
amount that an enterprise is capable of producing in the short term (Yıldıztekin, 2010:198).

Various production losses may occur during production for a number of reasons such as
repair, maintenance, failures and interruptions (Tekin, 1977:13). Such production losses are

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expected and named as functioning interruption (Şimşek and Çelik, 2011:97). Practical
capacity is found by excluding functioning interruptions from the theoretical capacity.

Actual capacity is the part of the production amount obtain in a certain time, which is sold in
case of adequate demand (Tekin, 2012:233).

The ratio of practical capacity to the actual capacity is called as operation degree (capacity
use ratio). Decreases in the capacity use ratio address to a stagnation in the economy and
increases address to an expansion in the economy (Arabacı and Arabacı, 2008:94). Operation
degree may be calculated with the following formula;

ActualCapa city
Operation Degree =
Pr acticalCap acity

If the operation degree is equal to 1, it means that the enterprise produces with full capacity.
If the operation degree is higher than 1, it means that actual capacity is higher than the
practical capacity and close to maximum capacity level. If the operation degree is lower than
1, it means that there is a deficiency in the capacity use.
It is impossible for enterprises to work in full capacity due to reasons like power cuts, strikes
and lockouts, lack of demand (Kaya et al., 2009:314). The time in which no operation is
carried out or which is wasted due to the mentioned reasons is called idle capacity.

Optimum capacity is defined as the annual production volume which provides the enterprise
with the facility to work with minimum average unit cost. The enterprise's production
capacity away from the optimum capacity production unit per variable and fixed costs have
been increasing (Tekin, 2012: 233-234).

1.2. Capacity Selection

Capacity should be selected in a way to respond to the changes in the current and future
capacity in consideration of the factors like demand, financial resources, factory location,
technical facilities, working hours, enterprise management, costs and technology. Decisions
regarding the capacity selection may be realized through the following processes (Tekin,
2012:250);
a. Determination of the increase in economic capacity
b. Determination of the number of economic shifts
c. Determination of the production capacity fitting to the seasonal demand
d. Determination of the amounts of inputs like semi-finished products, operating supplies etc.
to be purchased from other enterprises
e. Preparation of a capacity plan in compliance with the technological developments and
unexpected situations

2. LINEAR PROGRAMMING

W.W. Leontief developed the input-output analysis in line with the current Linear
Programming model in 1930 and Hitchcock and T.C. Koopmans developed the Linear
Programming model in order to provide a solution for transportation problems in the years
between 1930 and 1940 (Tekin, 2010: 52). Today’s linear programming model was
developed by G. B. Dantzig (Alptekin, quoted by Bircan and Kartal, 2003:132). Purpose of
Linear Programming is to select the best option among lots of options (Esin, 1998:24-298).

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When the international literature is reviewed, it is seen that Linear Programming model has
been used for long years in the fields of math, medicine, statistics and business
administration. Besides basic mathematical approaches, calculation of the optimum output,
capacity planning and use in administrative and industrial practices are included in the
researches. (Markowitz, 1957; Hanssmann and Hess, 1960; Charness and Cooper, 1961;
Hadley; 1962; Dantzig, 1965; Simmonard and Jewel, 1966; Khachiyan, 1980; Saul, 1982;
Ferrier and Lovell, 1990; Ghodsypour and O'brien, Richard, 1996; 1998; Candes and Tao,
2005).

In consideration of researches in our country, linear programming model is used in different

disciplines and industries. Agricultural enterprises, dairy and livestock breeding enterprises,
forestry product management, construction sector, textile sector, furniture sector,
transportation sector and energy sector may be given as examples. These researches mostly
focus on issues like optimum production or production planning for the enterprise or the
sector Karagöz, 1988; İnan, 1992; Yavuz, 1992; Paksoy, 2001; Keleş 2003; Karahalil, 2003;
Bircan and Kartal, 2004; Kayalıdere and Kargın, 2004; Güneş, 2004; Büyükkeklik, 2007;
Patır, 2009; Yılmaz, 2010; Ergülen and Kazan, 2012).

There are two solution methods in Linear Programming, which are graphical solution method
and simplex solution method (Halaç, 1995:363-410). Graphical solution method is used in
the solution of Linear Programming problems with three variables (Tekin, 2010:58) and
simplex solution method is used in the solution of Linear Programming problems with more
than three variables (Tekin, 2010, 62).

According to simplex method, firstly the mathematical model is established and then the
variables are added to the inequalities in the model and an equality is obtained and
formulated. After that, objective function and constraints are placed in the simplex table
(Özkan, 2012:7-83. Constraints show that the labor force, machines and other resources held
by the decision makers are limited (Esin, 1998:24-298).
Linear programming technique is based on the following assumptions (Tekin 2010: 57):
a) Objective function and constraints should be properly defined. It should be clearly
specified whether the purpose is profit maximization or cost minimization.
b) Variables must be expressible in figures.
c) Variables must be associated with each other.
d) Resources to be used must be limited.
e) Relations between variables must be linear.
f) The opportunity of alternative selection among variables must be available.
g) The problem to which linear programming is to be applied must be short-term.
h) Dependent variables must be zero or positive.
There are three factors to be taken into consideration in the theoretical structure of linear
programming: objective function, constraints and positivity condition (Paul, 2008:9-115).
These are;
xj: Decision variables (like production or cost amounts),
cj: Unit profit or cost coefficient,
bi: Resource capacity,
aij: Technical coefficient
Generally, theoretical structure of a linear programming problem may be as follows:
n
Z =  CjXj (j = 1,2, ..., n) Objective Function (max, min)
j=1

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a
j=1
ij xj  bi (I = 1,2, ..., m) Constraints (≥, may also be =)

xj≥0
( j = 1, 2, ... ,n ) Positivity Condition.
Theoretical model of Linear Programming is shown as follows by means of matrix notation:
C1n: Matrix of the coefficient line of target equation
Xn1: Matrix of the decision variables column
Amn: Matrix of the constraint coefficients
Bm1: Matrix of the capacity column

Z = CX
AX ≤ B model,
X≥0
X1
X2
Z = CX = [ c1 c2 . . . cn] . . Objective Function
.
.
Xn

a11 a12. . . a1n X1 ≥ b1

a21 a22 . . . a2n X2 b2
. . . . . . . = . Constraints
. . . . . . . . .
. . . . . . . ≤ .
am1 am2 . . . amn Xn bm

x1 , x2 , ... xn ≥ 0 Positivity Condition.

3. CAPACITY PLANNING THROUGH LINEAR PROGRAMMING

Programming problems are related to the effective distribution or use of poor resources in
order to meet the needs (Gass, 2003:3). Stunning developments in technology provides
modern enterprises with facilities of information gathering and problem solving.

Considering two enterprises, which have same amount of capacity or machines, process same
amount and quality of raw materials, have employees with same level of experience and
knowledge, it is seen that one of them has a more productive and profitable production
activity (Bircan and Kartal, 2003:132). In other words, the reason behind this difference in
results, despite the fact that there is no difference in production factors, is the difference in
the achievement of optimum results among enterprises.

Linear Programming is generally used as a mathematical model by many managers and

mathematicians in the solution of enterprise problems (Özkan, 2012). Mixture problems,

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task distribution problems, capacity loading problems, production programming problems,

purchase problems, investment problems and transportation problems are some of the
problems solved by means of Linear Programming models (Teknik 2010).

4. THE PRACTICE OF DETERMINING THE UNITS CAUSING STRAITS AND

IDLE CAPACITIES IN A TEXTILE ENTERPRISE

This study focuses on the solution of capacity planning problem by means of quantitative
decision-making method, determination and elimination of straits in main production units in
established industrial enterprises. A textile company engaged in women outerwear in
Istanbul is selected as the place of practice. Data obtained from this factory are analyzed
with WinQSB program.

4.1. Textile Production Process

In the textile factory, fabrics procured from domestic and foreign suppliers are stocked in
warehouses and meters and fabric errors are measured by means of fabric control machines.
Data obtained are conveyed to the Model unit. In the light of this information, the model unit
makes the necessary calculations according to the clothes in the model and notifies the
cutting unit and planning departments of the obtained information. The planning department
calculates cutting-production losses and informs cutting, sewing, ironing and packaging
units about the output. Bar codes in the number of pieces calculated is distributed to the
departments. Each department swipes the bar code of the produced product by means of a
bar code device and thus product tracking is performed. In line with the instructions, the
warehouse delivers fabrics and consumables (interlining, lining, pocketing, felt, fiber,
thread) to the cutting unit by writing batch numbers and by means of transpalets. Model unit
informs the cutting unit about the mold to be used and the cutting unit cuts fabrics with such
mold. After the cutting process, fabric pieces are conveyed to the sewing unit to be sewed
and then sent to the ironing unit through a rail system. After ironing is completed, products
are delivered to the packaging unit. Following the completion of packaging process,
products are sorted according to their destination and shipped.

Work flow chart of the textile enterprise, production process of which is summarized, is
given in the Figure 1.
Raw Material

Packaging
Cutting Unit

Sewing Unit

Ironing
Unit

Unit

Figure 1. Work Flow Chart of the Enterprise

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4.2. Main Production Units

4.2.1. Raw Material Unit

The fabrics and consumables required for textile production are procured from Istanbul,
Bursa, Gaziantep and Adana in the country and imported from Germany, China, France and
Holland out of the country. Therefore, there is no limitation in terms of raw material for the
production. Fabrics stored in the storage unit are put through shrinkage, rubbing, wing and
barré (fabric dye quality) tests. Furthermore, storage is not considered as a constraint as the
warehouses are large enough (15000m2).

4.2.2. Cutting Unit

Molds prepared in the model unit where the product design is made, which do not have a
direct influence on production, and mold information are given to the cutting unit that has an
area of 7500m2. The cutting unit places the molds and lays on the fabrics delivered by the
warehouse in line with work orders and customs. Plaid fabrics are cut with a hand motor by
virtue of their properties. Flat fabrics are cut by means of a computed-aided cutting system.
The cut fabrics are marked with a marking method, indicating the pieces to be sewed to each
other. After this process, pieces to be interlined are processed in 2 interlining machines and
other pieces are directly conveyed to the sewing unit by means of transpalets. Due to
capacity deficiency in the sewing unit, a part of the fabrics is sent to the respective
workshops for contract sewing.

4.2.3. Sewing Unit

Fabrics, which are put through the required processes in the cutting unit, are sewed on 8
bands consisting of 140 sewing machines. Button-buttonhole works are also performed by
this unit. After going through all the processes, products are taken to the ironing unit in 20-
piece cases by means of transpalets. The sewing unit has an area of 150000m2, but the area
used is only 500m2.

4.2.4. Ironing Unit

The sewed products are sorted according to the ironing degree as those to be ironed with
hand iron and those to be ironed with press iron. There are 30 hand irons and 30 press irons
in this unit. Ironing unit has an area of 7500 m2. Last checks are performed after the ironing
process and the faulty products are either sent to sewing unit or ironing unit according to the
source of defect. Faultless products are sent to the packaging unit by means of a rail system
with a suspender.

4.2.5. Packaging Unit

Sewed and ironed products, which are ready to be used, are conveyed to the packaging unit
that is located on the same floor and has an area of 7500 m2. Packaging is performed in two
ways: the first one is suspended packaging process by means of automatic machine and the
other is hand packaging. Bard codes are affixed to the products and they are sorted according
to their sizes in this unit. As the enterprises is engaged in export, packages are sorted
according to the countries and shipped.

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4.3. Products Manufactured in the Enterprise

The enterprise manufactures the products in the Table 1 upon order. The cutting, sewing,
ironing and packaging times specified in the table are based on the experience from previous
years.

Table 1: Production times of products and annual average output

Unit Production Times (Minutes) Annual Output (Pcs)
PRODUC
TS Cuttin Sewing Ironing Packaging Enterprise Contract
g
Blouse 8 50 6 4 126619 53254
X1
Jacket X2 10 70 12 5 77775 69230
Dress X3 10 45 12 10 141189 79046
Skirt X4 5 30 8 5 74893 124237
Coat X5 20 80 15 8 16007 40870
Pants X6 8 25 6 5 135424 150737
Scarf X7 5 20 3 1 2356 11775
Shorts X8 5 30 3 2 4136 16
Coveralls 10 55 10 5 2630 2099
X9
Tunic X10 10 45 7 5 16 3438
Vest X11 8 45 5 3 734 4770

4.4. Determination of Constraints

Right-side constants: They are found by utilizing the annual average working hours of main
production units. One-year average virtual working hours, which are calculated on the basis
of the enterprise data, are shown below in minutes.

Cutting Sewing Ironing Packaging

10,108,800 23,587,200 8,424,000 6,739,200

Technical coefficients: Constraint coefficients are related to the determination of the

capacities of main production units by the products manufactured. These technical
coefficients are obtained from the production reports of the enterprise, covering the period as
from 2010 to the end of 2013.

4.4.1. Cutting Unit Technical Coefficients: Cutting times of each product are given in the
Table 1. Accordingly, cutting constraint equation is found as;
8x1+10x2+10x3+5x4+15x5+8x6+5x7+5x8+10x9+10x10+8x11 ≤ 10.108.800
4.4.2. Sewing Unit Technical Coefficients: Sewing times of each product are given in the
Table 1. Accordingly, cutting constraint equation is found as;
50x1+70x2+45x3+30x4+80x5+25x6+20x7+30x8+55x9+45x10+45x11 ≤ 23.587.200

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4.4.3. Ironing Unit Technical Coefficients: Sewing times of each product are given in the
Table 1. Accordingly, cutting constraint equation is found as;
6x1+12x2+12x3+8x4+15x5+6x6+3x7+3x8+10x9+7x10+5x11 ≤ 8.424.000

4.4.4. Packing Unit Technical Coefficients: Sewing times of each product are given in the
Table 1. Accordingly, cutting constraint equation is found as;
4x1+5x2+10x3+5x4+8x5+5x6+1x7+2x8+5x9+5x10+3x11 ≤ 6.739.200
4.5. Determination of Objective Function Coefficients

Consistency of the Linear Programming model to be established for capacity planning is

proportional to the accuracy of unit profits to be used as coefficient in the objective function.
Product sales prices received from the enterprise and variable cost and profit values are
given in Euros in Table 2.

Table 2: Unit Profits of Products

Unit Sales Price (1) Unit Value Cost (2) Unit Profit (3) = (1)-
(2)
Blouse X1 19.5 15 4.5
Jacket X2 27.3 21 6.3
Dress X3 27.3 21 6.3
Skirt X4 9.1 7 2.1
Coat X5 45.5 35 10.5
Pants X6 22.1 17 5.1
Scarf X7 12.48 9.6 2.88
Shorts X8 11.7 9 2.7
Coveralls X9 32.5 25 7.5
Tunic X10 23.4 18 5.4
Vest X11 15.6 12 3.6
According to this data, the objective function that maximizes the enterprise’s profit will be as
follows;
Zmax = 4,5x1 + 5,1x2 + 6,3x3 + 2,1x4 + 10,5x5 + 5,4x6

4.6. Linear Programming Model

Total product sales amounts and annual average sales amounts of the enterprises between the
years 2010-2013 are given in Table 3.

Table 3: Annual Products Sales Average

PRODUCT 2010 2011 2012 2013 Total Average
Blouse 179,865 179,865 179,865 179,865 719,492 179,865
X1
Jacket X2 147,040 146,995 146,995 146,995 588,020 147,005

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Dress X3 220,230 220,245 220,225 220,240 880,940 220,235

Skirt X4 199,136 199,132 199,120 199,132 263,508 199,130
Coat X5 65,882 65,870 65,873 65,883 263,508 65,877
Pants X6 286,151 286,170 286,158 286,165 1,144,644 286,161
Scarf X7 14,121 14,133 14,142 14,128 56,524 14,131
Shorts X8 4,159 4,157 4,142 4,150 16,608 4,152
Coveralls 4,730 4,729 4,721 4,736 18,916 4,729
X9
Tunic X10 3,456 3,455 3,449 3,456 13,816 3,454
Vest X11 5,501 5,507 5,505 5,503 22,016 5,504
Linear programming model (Table 4) is developed under the light of the foregoing
information.
Positivity Condition;
x1, x2, x3, x4, x5, x6, x7, x8, x9, x10, x11 ≥ 0

Table 4: Linear Programming Model

The model developed is analyzed by means of WinQSB computer software and optimum
solution values given in the Table 5 are obtained. Accordingly, the enterprise makes a profit
of 29,618,370 Euros. However, when the capacities of units are examined, it is seen that
sewing unit works with full capacity and cutting unit works with an idle capacity of
5,313,456 hours, ironing unit works with an idle capacity of 3,737,398 hours and packaging
unit works with an idle capacity of 3,476,261 hours. Moreover, a large part of the products,
cutting of which is completed in the sewing unit, are put through contract sewing. Therefore,
it is possible to claim that the sewing unit constitutes a strait.

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Table 5: Solution of the Model

It is suggested that, when the strait caused by the lack of capacity in the sewing unit, the idle
capacity in other units will become usable. For this purpose, 7 bands 115 machines should be
added to the currently existing 8 bands 140 machines in the sewing unit. Cutting unit has
enough area for this expansion. No additional cost will be needed in terms of building and
facility. In this case, annual operating capacity of the sewing unit will be 42,962,400 hours.
The new linear programming model is shown in the Table 6.

Table 6. The New Model

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In the new model, the enterprise will become capable of meeting the whole market demand.

Table 7 Solution of the New Model

As seen in the Table 7, the enterprise will be capable of manufacturing the products, that are
sent for contract sewing, and profit of the enterprise will increase to 57,905,430 Euros.
Sewing unit works with full capacity and at a level to meet demands, while cutting unit
works with an idle capacity of 1,092,900 hours, ironing unit works with an idle capacity of
15,460 hours and packaging unit works with an idle capacity of 1,004,750 hours.

DISCUSSION AND CONCLUSIONS

Textile sector is one of the most important export items of Turkey. Enterprises should work
with optimum capacity to subsist in global markets. In this context, all the production
processes of the enterprise should be efficiently carried out.
The enterprise produced blouses, jackets, dresses, skirts, coats, pants, scarfs, shots, coveralls,
tunics and vests in the production period between 2010-2013. A large part of the products are
put through contract sewing. The enterprise exports all its products.
A market limitation model is developed for optimum use of capacity on the basis of the
enterprise’s data of the last three years. In this solution, it is seen that the cutting, ironing and
packaging units of the enterprise works with idle capacity and the enterprise makes a profit
of 29,618,370 Euros. However, a new model has been developed and analyzed in order to
ensure that the enterprise manufactures its own products, which are mainly sewed by
contract manufacturing. In this new solution, the enterprise has doubled its profitability by
increasing its profit 57,905,430 Euros. The idle capacity in cutting, ironing and packaging
units has decreased, but still exists. If the enterprise chooses to assign the workers to work
for the new bands to be established from the cutting, ironing and packaging units, the idle
capacity will be eliminated and the available labor force will be used more efficiently. Thus,
the enterprise will expand the sewing unit by receiving less external labor force and reduce

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costs. Alternative and different models may be developed in consideration of the results of
the sensitivity analysis of this model, statuses in the main production units and new market
restrictions.

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