Modelling insourcing and outsourcing services for manufacturing operations

Abstract

The paper highlights the issue of searching for the minimal cost of operating a manufacturing company, taking into account that the insourcing and outsourcing teams are able to carry out identical manufacturing operations. As the teams' operating costs vary it is necessary to determine a sequence for employing either insourcing or outsourcing teams so that the total manufacturing costs tend to be minimised. The mathematical model of the system as well as equations of state and sample algorithms responsible for choosing the proper teams are presented. The pseudocode illustrates the way in which the team selection simulator is created.