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Optimal control of a production-inventory system with customer impatience. (English) Zbl 1193.90014

Summary: We consider the control of a production-inventory 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.

MSC:

90B05 Inventory, storage, reservoirs
90B30 Production models
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