Dynamic scheduling of a two-class queue with setups

We analyze two scheduling problems for a queueing system with a single server and two customer classes. Each class has its own renewal arrival process, general service time distribution, and holding cost rate. In the first problem, a setup cost is incurred when the server switches from one class to the other, and the objective is to minimize the long-run expected average cost of holding customers and incurring setups. The setup cost is replaced by a setup time in the second problem, where the objective is to minimize the average holding cost. By assuming that a recently derived heavy traffic principle holds not only for the exhaustive policy but for nonexhaustive policies, we approximate (under standard heavy traffic conditions) the dynamic scheduling problems by diffusion control problems. The diffusion control problem for the setup cost problem is solved exactly, and asymptotics are used to analyze the corresponding setup time problem. Computational results show that the proposed scheduling policies are within several percent of optimal over a broad range of problem parameters.