Average Cost Optimality for an Unreliable Two-Machine Flowshop with Limited Internal Buffer

19 Pages Posted: 9 Apr 2008 Last revised: 26 Apr 2014

See all articles by Ernst Presman

Ernst Presman

Russian Academy of Sciences (RAS)

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management

Hanqin Zhang

Chinese Academy of Sciences (CAS) - Academy of Mathematics and Systems Sciences

Arnab Bisi

Purdue University - Krannert School of Management; Johns Hopkins University - Carey Business School

Date Written: 2000

Abstract

We consider a production planning problem in a two-machine flowshop subject to breakdown and repair of machines and subject to nonnegativity and upper bound constraints on work-in-process. The objective is to choose machine production rates over time to minimize the long-run average inventory/backlog and production costs. For sufficiently large upper bound on the work-in-process, the problem is formulated as a stochastic dynamic program. We then establish a verification theorem and a partial characterization of the optimal control policy if it exists.

Keywords: production planning, stochastic dynamic programming, optimal control, long-run average cost

JEL Classification: M11, C61, M20

Suggested Citation

Presman, Ernst and Sethi, Suresh and Zhang, Hanqin and Bisi, Arnab, Average Cost Optimality for an Unreliable Two-Machine Flowshop with Limited Internal Buffer (2000). Annals of Operation Research, Vol. 98, pp. 333-351, 2000. Available at SSRN: https://ssrn.com/abstract=1118178

Ernst Presman

Russian Academy of Sciences (RAS) ( email )

Leninsky Ave, 14
Moscow, 119991
Russia

Suresh Sethi (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

800 W. Campbell Road, SM30
Richardson, TX 75080-3021
United States

Hanqin Zhang

Chinese Academy of Sciences (CAS) - Academy of Mathematics and Systems Sciences ( email )

Zhong-Guan-Cun-Dong-Lu 55, Haidian District
Beijing, Beijing 100080
China

Arnab Bisi

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

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