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 language | English (US) |
|---|---|
| Pages (from-to) | 267-272 |
| Number of pages | 6 |
| Journal | Operations Research Letters |
| Volume | 38 |
| Issue number | 4 |
| DOIs | |
| State | Published - Jul 2010 |
Keywords
- Customer impatience
- Make-to-stock queues
- Markov decision processes
- Optimal control
- Production-inventory systems