Optimal control of a productioninventory system with customer impatience

Saif Benjaafar, Jean Philippe Gayon, Seda Tepe

Research output: Contribution to journalArticlepeer-review

40 Scopus citations

Abstract

We consider the control of a productioninventory system with impatient customers. We show that the optimal policy can be described using two thresholds: a production base-stock level that determines when production takes place and an admission threshold that determines when orders should be accepted. We describe an algorithm for computing the performance of the system for any choice of base-stock level and admission threshold. In a numerical study, we compare the performance of the optimal policy against several other policies.

Original languageEnglish (US)
Pages (from-to)267-272
Number of pages6
JournalOperations Research Letters
Volume38
Issue number4
DOIs
StatePublished - Jul 1 2010

Keywords

  • Customer impatience
  • Make-to-stock queues
  • Markov decision processes
  • Optimal control
  • Production-inventory systems

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