Optimal control for a tandem network of queues with blocking

The authors consider a two-station tandem queue with no intermediate buffer. Jobs at the first station may be blocked when the following station is occupied by another job. The objective is to control the arrival and departure processes, subject to some capacity limits, so that an expected discounted profit function is maximized. The authors prove that the optimal control policy is of a threshold type, and the characterization of the threshold is provided.