Stock Rationing in an M/E k /1 Make-to-Stock Queue
This paper considers the stock rationing problem of a single-item, make-to-stock production system with several demand classes and lost sales. When demand is Poisson and processing time has an Erlang distribution, we show that a single-state variable called work storage level can be employed to completely capture the information regarding inventory level and the status of current production. The optimal rationing policy can be characterized by a sequence of monotone critical work storage levels. For each demand class, there exists a work storage level at or below which it is optimal to start rejecting the demand of this class in anticipation of future arrival of higher-priority demands. The optimal production policy can also be characterized by a critical work storage level. Our numerical examples indicate that a critical stock level policy, which ignores information on the status of current production, performs very well.
Volume (Year): 46 (2000)
Issue (Month): 1 (January)
|Contact details of provider:|| Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA|
Web page: http://www.informs.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Albert Y. Ha, 1997. "Inventory Rationing in a Make-to-Stock Production System with Several Demand Classes and Lost Sales," Management Science, INFORMS, vol. 43(8), pages 1093-1103, August.
- Donald M. Topkis, 1968. "Optimal Ordering and Rationing Policies in a Nonstationary Dynamic Inventory Model with n Demand Classes," Management Science, INFORMS, vol. 15(3), pages 160-176, November.
- Kenneth R. Baker & Michael J. Magazine & Henry L. W. Nuttle, 1986. "The Effect of Commonality on Safety Stock in a Simple Inventory Model," Management Science, INFORMS, vol. 32(8), pages 982-988, August.
- Felipe K. Tan, 1974. "Optimal Policies for a Multi-Echelon Inventory Problem with Periodic Ordering," Management Science, INFORMS, vol. 20(7), pages 1104-1111, March.
- Paul H. Zipkin, 1995. "Performance Analysis of a Multi-Item Production-Inventory System Under Alternative Policies," Management Science, INFORMS, vol. 41(4), pages 690-703, April.
- Peter L. Jackson, 1988. "Stock Allocation in a Two-Echelon Distribution System Or "What to Do Until Your Ship Comes In"," Management Science, INFORMS, vol. 34(7), pages 880-895, July.
- Yigal Gerchak & Michael J. Magazine & A. Bruce Gamble, 1988. "Component Commonality with Service Level Requirements," Management Science, INFORMS, vol. 34(6), pages 753-760, June.
- Morris A. Cohen & Paul R. Kleindorfer & Hau L. Lee, 1988. "Service Constrained (s, S) Inventory Systems with Priority Demand Classes and Lost Sales," Management Science, INFORMS, vol. 34(4), pages 482-499, April.
- Steven Nahmias & W. Steven Demmy, 1981. "Operating Characteristics of an Inventory System with Rationing," Management Science, INFORMS, vol. 27(11), pages 1236-1245, November.
- David A. Collier, 1982. "Aggregate Safety Stock Levels and Component Part Commonality," Management Science, INFORMS, vol. 28(11), pages 1296-1303, November.
When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:46:y:2000:i:1:p:77-87. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.