Article ID: | iaor20081499 |
Country: | United States |
Volume: | 54 |
Issue: | 5 |
Start Page Number: | 876 |
End Page Number: | 892 |
Publication Date: | Sep 2006 |
Journal: | Operations Research |
Authors: | Ata Bar |
Keywords: | programming: dynamic |
As a model of make-to-order production, we consider an admission control problem for a multiclass, single-server queue. The production system serves multiple demand streams, each having a rigid due-date lead time. To meet the due-date constraints, a system manager may reject orders when a backlog of work is judged to be excessive, thereby incurring lost revenues. The system manager strives to minimize long-run average lost revenues by dynamically making admission control and sequencing decisions. Under heavy-traffic conditions the scheduling problem is approximated by a Brownian control problem, which is solved explicitly. Interpreting this solution in the context of the original queueing system, a nested threshold policy is proposed. A simulation experiment is performed to demonstrate the effectiveness of this policy.