We address an operation assignment and capacity allocation problem that arises in semiconductor industries and flexible manufacturing systems. We assume the automated machines have scarce time and tool magazine capacities and the tools are available in limited quantities. The aim is to select a subset of operations with maximum total weight. We show that the problem is NP-hard in the strong sense, develop two heuristics and a Tabu Search procedure. The results of our computational tests have revealed that our Tabu Search procedure produces near optimal solutions very quickly. (C) 2007 Elsevier Ltd. All rights reserved.