On optimal dynamic pegging in rescheduling for new order arrival

A rescheduling method for new order arrival is presented based on the concept of dynamic pegging in multi-level production. Upon the arrival of new, unplanned orders, dynamic pegging enables the re-assignment of the Work-In-Progress (WIP) to the existing or newly arrived orders in such a way that the cost of rescheduling is minimized. A simple yet inspiring Mixed Integer Programming (MIP) model is proposed that combines dynamic pegging with rescheduling. The resulting schedules are compared with the ones obtained from two other basic rescheduling approaches. Analysis of the comparisons confirm the superiority of the proposed method in terms of total rescheduling costs.