Scheduling a Make-To-Stock Queue: Index Policies and Hedging Points
A single machine produces several different classes of items in a make-to-stock mode. We consider the problem of scheduling the machine to regulate finished goods inventory, minimizing holding and backorder or holding and lost sales costs. Demands are Poisson, service times are exponentially distrib...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | en_US |
| Published: |
Massachusetts Institute of Technology, Operations Research Center
2004
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| Online Access: | http://hdl.handle.net/1721.1/5212 |
| _version_ | 1826202877179199488 |
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| author | Veatch, Michael H. Wein, Lawrence M. |
| author_facet | Veatch, Michael H. Wein, Lawrence M. |
| author_sort | Veatch, Michael H. |
| collection | MIT |
| description | A single machine produces several different classes of items in a make-to-stock mode. We consider the problem of scheduling the machine to regulate finished goods inventory, minimizing holding and backorder or holding and lost sales costs. Demands are Poisson, service times are exponentially distributed, and there are no delays or costs associated with switching products. A scheduling policy dictates whether the machine is idle or busy, and specifies the job class to serve in the latter case. Since the optimal solution can only be numerically computed for problems with several products, our goal is to develop effective policies that are computationally tractable for a large number of products. We develop index policies to decide which class to serve, including Whittle's "restless bandit" index, which possesses a certain asymptotic optimality. Several idleness policies, which are characterized by hedging points, are derived, and the best policy is obtained from a heavy traffic diffusion approximation. Nine sample problems are considered in a numerical study, and the average suboptimality of the best policy is less than 3%. |
| first_indexed | 2024-09-23T12:23:42Z |
| format | Working Paper |
| id | mit-1721.1/5212 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T12:23:42Z |
| publishDate | 2004 |
| publisher | Massachusetts Institute of Technology, Operations Research Center |
| record_format | dspace |
| spelling | mit-1721.1/52122019-04-10T15:18:12Z Scheduling a Make-To-Stock Queue: Index Policies and Hedging Points Veatch, Michael H. Wein, Lawrence M. A single machine produces several different classes of items in a make-to-stock mode. We consider the problem of scheduling the machine to regulate finished goods inventory, minimizing holding and backorder or holding and lost sales costs. Demands are Poisson, service times are exponentially distributed, and there are no delays or costs associated with switching products. A scheduling policy dictates whether the machine is idle or busy, and specifies the job class to serve in the latter case. Since the optimal solution can only be numerically computed for problems with several products, our goal is to develop effective policies that are computationally tractable for a large number of products. We develop index policies to decide which class to serve, including Whittle's "restless bandit" index, which possesses a certain asymptotic optimality. Several idleness policies, which are characterized by hedging points, are derived, and the best policy is obtained from a heavy traffic diffusion approximation. Nine sample problems are considered in a numerical study, and the average suboptimality of the best policy is less than 3%. 2004-05-28T19:28:20Z 2004-05-28T19:28:20Z 1992-09 Working Paper http://hdl.handle.net/1721.1/5212 en_US Operations Research Center Working Paper;OR 266-92 2039868 bytes application/pdf application/pdf Massachusetts Institute of Technology, Operations Research Center |
| spellingShingle | Veatch, Michael H. Wein, Lawrence M. Scheduling a Make-To-Stock Queue: Index Policies and Hedging Points |
| title | Scheduling a Make-To-Stock Queue: Index Policies and Hedging Points |
| title_full | Scheduling a Make-To-Stock Queue: Index Policies and Hedging Points |
| title_fullStr | Scheduling a Make-To-Stock Queue: Index Policies and Hedging Points |
| title_full_unstemmed | Scheduling a Make-To-Stock Queue: Index Policies and Hedging Points |
| title_short | Scheduling a Make-To-Stock Queue: Index Policies and Hedging Points |
| title_sort | scheduling a make to stock queue index policies and hedging points |
| url | http://hdl.handle.net/1721.1/5212 |
| work_keys_str_mv | AT veatchmichaelh schedulingamaketostockqueueindexpoliciesandhedgingpoints AT weinlawrencem schedulingamaketostockqueueindexpoliciesandhedgingpoints |