Hostname: page-component-76fb5796d-vvkck Total loading time: 0 Render date: 2024-04-28T04:19:23.546Z Has data issue: false hasContentIssue false

TWO CONTROL POLICIES FOR STOCHASTIC EOQ-TYPE MODELS

Published online by Cambridge University Press:  11 January 2002

Oded Berman
Affiliation:
University of Toronto, Toronto, Canada E-mail: berman@mgmt.utoronto.ca
David Perry
Affiliation:
University of Haifa, Haifa, Israel E-mail: dperry@stat.haifa.uc.il

Abstract

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 t0.

Type
Research Article
Copyright
© 2001 Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)