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Cost Models for Stochastic Clearing Systems

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  • Shaler Stidham

    (North Carolina Stale University, Raleigh, North Carolina)

Abstract

Stochastic clearing systems are characterized by a stochastic input process and an output mechanism that intermittently clears the system, i.e., instantaneously restores the net quantity in the system to zero. Asymptotic properties of such systems can be derived under weak probabilistic assumptions, the essential requirement being that limiting behavior can be determined by “averaging over a cycle,” as is the case, for example, with regenerative processes. In this paper we consider the problem of finding the optimal level, q , at which to clear when there are fixed clearing and variable holding costs. We also study a generalization of a clearing system in which the clearing operation restores the net quantity to a level m , which may be different from zero. Applications to bulk-service queues, demand-responsive public-service systems, and ( s , S ) inventory systems, among others, are discussed. The exact solutions that we obtain for the optimal clearing parameters are compared to those implied by deterministic approximations.

Suggested Citation

  • Shaler Stidham, 1977. "Cost Models for Stochastic Clearing Systems," Operations Research, INFORMS, vol. 25(1), pages 100-127, February.
    • Handle: RePEc:inm:oropre:v:25:y:1977:i:1:p:100-127
    DOI: 10.1287/opre.25.1.100
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    Cited by:

    1. Sila Çetinkaya & Chung-Yee Lee, 2000. "Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems," Management Science, INFORMS, vol. 46(2), pages 217-232, February.
    2. Canbolat, Pelin G., 2020. "Bounded rationality in clearing service systems," European Journal of Operational Research, Elsevier, vol. 282(2), pages 614-626.
    3. Tunc, Huseyin & Kilic, Onur A. & Tarim, S. Armagan & Eksioglu, Burak, 2011. "The cost of using stationary inventory policies when demand is non-stationary," Omega, Elsevier, vol. 39(4), pages 410-415, August.
    4. D. Beyer & S. P. Sethi, 1999. "The Classical Average-Cost Inventory Models of Iglehart and Veinott–Wagner Revisited," Journal of Optimization Theory and Applications, Springer, vol. 101(3), pages 523-555, June.
    5. Artalejo, J. R., 2000. "G-networks: A versatile approach for work removal in queueing networks," European Journal of Operational Research, Elsevier, vol. 126(2), pages 233-249, October.
    6. Germs, Remco & Van Foreest, Nicky D. & Kilic, Onur A., 2016. "Optimal policies for production-clearing systems under continuous-review," European Journal of Operational Research, Elsevier, vol. 255(3), pages 747-757.
    7. Antonis Economou & Athanasia Manou, 2013. "Equilibrium balking strategies for a clearing queueing system in alternating environment," Annals of Operations Research, Springer, vol. 208(1), pages 489-514, September.
    8. Sandun C. Perera & Suresh P. Sethi, 2023. "A survey of stochastic inventory models with fixed costs: Optimality of (s, S) and (s, S)‐type policies—Discrete‐time case," Production and Operations Management, Production and Operations Management Society, vol. 32(1), pages 131-153, January.
    9. Wang, Jinting & Liu, Bin & Li, Jianghua, 2008. "Transient analysis of an M/G/1 retrial queue subject to disasters and server failures," European Journal of Operational Research, Elsevier, vol. 189(3), pages 1118-1132, September.
    10. Qi‐Ming He & James H. Bookbinder & Qishu Cai, 2020. "Optimal policies for stochastic clearing systems with time‐dependent delay penalties," Naval Research Logistics (NRL), John Wiley & Sons, vol. 67(7), pages 487-502, October.
    11. Izzet Sahin & Diptendu Sinha, 1987. "Renewal approximation to optimal order quantity for a class of continuous‐review inventory systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 34(5), pages 655-667, October.
    12. David Perry & Wolfgang Stadje & Shelemyahu Zacks, 2005. "Sporadic and Continuous Clearing Policies for a Production/Inventory System Under an M / G Demand Process," Mathematics of Operations Research, INFORMS, vol. 30(2), pages 354-368, May.
    13. D. Beyer & S. P. Sethi, 1997. "Average Cost Optimality in Inventory Models with Markovian Demands," Journal of Optimization Theory and Applications, Springer, vol. 92(3), pages 497-526, March.
    14. Barron, Yonit, 2016. "Clearing control policies for MAP inventory process with lost sales," European Journal of Operational Research, Elsevier, vol. 251(2), pages 495-508.
    15. Perry, David & Stadje, Wolfgang, 2000. "Risk analysis for a stochastic cash management model with two types of customers," Insurance: Mathematics and Economics, Elsevier, vol. 26(1), pages 25-36, February.
    16. Sandun C. Perera & Suresh P. Sethi, 2023. "A survey of stochastic inventory models with fixed costs: Optimality of (s, S) and (s, S)‐type policies—Continuous‐time case," Production and Operations Management, Production and Operations Management Society, vol. 32(1), pages 154-169, January.
    17. Oded Berman & Mahmut Parlar & David Perry & M. J. M. Posner, 2005. "Production/Clearing Models Under Continuous and Sporadic Reviews," Methodology and Computing in Applied Probability, Springer, vol. 7(2), pages 203-224, June.
    18. Jacobovic, Royi & Kella, Offer, 2020. "Minimizing a stochastic convex function subject to stochastic constraints and some applications," Stochastic Processes and their Applications, Elsevier, vol. 130(11), pages 7004-7018.
    19. Royi Jacobovic & Offer Kella, 2019. "Asymptotic independence of regenerative processes with a special dependence structure," Queueing Systems: Theory and Applications, Springer, vol. 93(1), pages 139-152, October.
    20. Bu, Qihui & Sun, Yun & Chai, Xudong & Liu, Liwei, 2020. "Strategic behavior and social optimization in a clearing queueing system with N-policy and stochastic restarting scheme," Applied Mathematics and Computation, Elsevier, vol. 381(C).
    21. Çetinkaya, SIla & Bookbinder, James H., 2003. "Stochastic models for the dispatch of consolidated shipments," Transportation Research Part B: Methodological, Elsevier, vol. 37(8), pages 747-768, September.
    22. Dimitrios Logothetis & Antonis Economou, 2023. "The impact of information on transportation systems with strategic customers," Production and Operations Management, Production and Operations Management Society, vol. 32(7), pages 2189-2206, July.
    23. Xiang, Mengyuan & Rossi, Roberto & Martin-Barragan, Belen & Tarim, S. Armagan, 2018. "Computing non-stationary (s, S) policies using mixed integer linear programming," European Journal of Operational Research, Elsevier, vol. 271(2), pages 490-500.
    24. Lagodimos, A.G. & Christou, I.T. & Skouri, K., 2012. "Computing globally optimal (s,S,T) inventory policies," Omega, Elsevier, vol. 40(5), pages 660-671.

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