Tandem queues with planned inventories

This paper explores a natural generalization of the classic tandem-queue model, designed specifically to represent make-to-stock production processes. In such systems, intermediate and finished goods can be produced and stored in advance of demand. The authors consider the simplest version of the model, where demand is a Poisson process, and the unit production times are exponentially distributed. They propose and test a tractable approximation scheme. The approximation appears to be quite accurate.