Dynamic scheduling in a make-to-stock system: A partial characterization of optimal policies

Dynamic scheduling in a make-to-stock system: A partial characterization of optimal policies

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Article ID: iaor20021720
Country: United States
Volume: 48
Issue: 5
Start Page Number: 811
End Page Number: 819
Publication Date: Sep 2000
Journal: Operations Research
Authors: , ,
Keywords: production
Abstract:

We consider the problem of dynamically allocating production capacity between two products to minimize the average inventory and backorder costs per unit time in a make-to-stock single machine system. Using sample path comparisons and dynamic programming, we give a characterization of the optimal hedging point policy for a certain region of the state space. The characterization is simple enough to lead to easily implementable heuristics and provides a formal justification of some of the earlier heuristics proposed.

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