Optimal Dynamic Scheduling Policy for a Make-To-Stock Production System

This paper considers the dynamic scheduling problem of a single-server, make-to-stock queue with two products. For the case of Poisson demands and exponential production times, we show that it is optimal to produce the product with the larger b µ index when it is backordered. If the production times...

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Bibliographic Details
Published in:Operations research 1997-01, Vol.45 (1), p.42-53
Main Author: Ha, Albert Y
Format: Article
Language:English
Subjects:
applications
Applied sciences
Capital costs
Cost efficiency
Cost functions
Dynamic programming
dynamic programming/optimal control
Exact sciences and technology
Heuristics
Inventory control, production control. Distribution
inventory/production
Make to stock
Mathematical functions
Operational research and scientific management
Operational research. Management science
Operations research
optimal control policies
Optimal policy
Production costs
Production scheduling
Scheduling
Scheduling, sequencing
sequencing in a stochastic system
Stochastic models
Studies
Unit costs
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Summary:This paper considers the dynamic scheduling problem of a single-server, make-to-stock queue with two products. For the case of Poisson demands and exponential production times, we show that it is optimal to produce the product with the larger b µ index when it is backordered. If the production times are identically distributed, the optimal policy can further be characterized by monotone switching curves. We also prove that a base stock policy coupled with a switching curve is optimal for some initial inventory levels. A simple linear switching rule for determining production priority is proposed and compared with other heuristic policies in a computational experiment.
ISSN:0030-364X
1526-5463
DOI:10.1287/opre.45.1.42