Abstract
Problems of inventory control and customer admission control are considered for a manufacturing system that produces one product to meet random demand. Four admission policies are investigated: lost sales, complete backordering, randomized admission, and partial backordering. These policies are combined with an integral inventory control policy, which releases raw items only when an incoming order is accepted and keeps the inventory position (total inventory minus outstanding orders) constant. The objective is to determine the inventory level and the maximum number of backorders, as well as the admission probability that maximize the mean profit rate of the system. The system is modeled as a closed queueing network and its performance is computed analytically. The optimal parameters for each policy are found using exhaustive search and convex analysis. Numerical results show that managing inventory levels and sales jointly through partial backordering achieves higher profit than other control policies.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: IEEE Transactions on Automation Science and Engineering
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
