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TWO CONTROL POLICIES FOR STOCHASTIC EOQ-TYPE MODELS
Published online by Cambridge University Press: 11 January 2002
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
- Information
- Probability in the Engineering and Informational Sciences , Volume 15 , Issue 4 , October 2001 , pp. 445 - 463
- Copyright
- © 2001 Cambridge University Press