Article ID: | iaor20023124 |
Country: | United States |
Volume: | 15 |
Issue: | 4 |
Start Page Number: | 445 |
End Page Number: | 463 |
Publication Date: | Jan 2001 |
Journal: | Probability in the Engineering and Informational Sciences |
Authors: | Perry D., Berman Oded |
Keywords: | control processes |
We present the production version of two EOQ-type models in heavy traffic. The output is interpreted by random demand and the input by a deterministic production plus random returns. In the ON part of the cycle, the inventory content is a reflected Brownian motion, and in the OFF part, it is a Brownian motion with a negative drift. The ON/OFF periods generate an alternative renewal process and the content-level process is a regenerative process. Two control policies are considered. In one policy that is natural under conditions of continuous review, production is stopped when the content level in the ON period reaches a predetermined level q. In the other policy, which resembles periodic review, production is stopped when the ON time reaches a predetermined time t(0).