Performance measures of a make-to-order inventory–production system

This paper develops two algorithms for computing the average total cost per product and other performance measures for a make-to-order inventory–production system. The two algorithms are developed by using matrix analytic methods. The first algorithm is based on the matrix-geometric solution of the Quasi-Birth-and-Death (QBD) Markov process. The second algorithm is based on the fundamental period of the QBD Markov process. The advantages and disadvantages of the two algorithms are discussed.