ON THE ADMISSION CONTROL AND DEMAND MANAGEMENT IN A TWO-STATION TANDEM PRODUCTION SYSTEM

摘要

This paper considers a two-station tandem production system con-sisting of make-to-stock and make-to-order facilities. The make-to-stock facility produces components which are served for external demands as well as internal make-to-order operations while the make-to-order facility processes customer orders with the option to accept or reject. We address the problem of coor-dinating the decision of when to accept customer order and when to satisfy component demand that maximizes the total expected discounted profit. To deal with this issue, we present a Markov decision process model of two-station tandem queueing system and characterize the structure of the optimal policy. We investigate the marginal impacts of system parameters on the optimal policy and implement a numerical experiment for comparing the performance between the optimal policy and the static policy with two fixed thresholds.