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Optimal Control of a Make-to-Stock System with Outsourced Production and Price-Sensitive Demand
Joint Authors
Wang, Huimin
Chen, Liuxin
Hao, Gang
Source
Discrete Dynamics in Nature and Society
Issue
Vol. 2014, Issue 2014 (31 Dec. 2014), pp.1-12, 12 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2014-07-06
Country of Publication
Egypt
No. of Pages
12
Main Subjects
Abstract EN
We consider a make-to-stock system with controllable demand rate (by varying product selling price) and adjustable service rate (by outsourcing production).
With one outsourcing alternative and a choice of either high or low price, the system decides at any point in time whether to produce or even outsource for additional capacity as well as which price to sell the product at.
We show in the paper that the optimal control policy is of dynamic threshold type: all decisions are based on the product inventory position which represents the state of the system; there is a state dependent base stock level to decide on production and a higher level on outsourcing; and there is a state dependent threshold which divides the choice of high and low prices.
American Psychological Association (APA)
Chen, Liuxin& Hao, Gang& Wang, Huimin. 2014. Optimal Control of a Make-to-Stock System with Outsourced Production and Price-Sensitive Demand. Discrete Dynamics in Nature and Society،Vol. 2014, no. 2014, pp.1-12.
https://search.emarefa.net/detail/BIM-461588
Modern Language Association (MLA)
Chen, Liuxin…[et al.]. Optimal Control of a Make-to-Stock System with Outsourced Production and Price-Sensitive Demand. Discrete Dynamics in Nature and Society No. 2014 (2014), pp.1-12.
https://search.emarefa.net/detail/BIM-461588
American Medical Association (AMA)
Chen, Liuxin& Hao, Gang& Wang, Huimin. Optimal Control of a Make-to-Stock System with Outsourced Production and Price-Sensitive Demand. Discrete Dynamics in Nature and Society. 2014. Vol. 2014, no. 2014, pp.1-12.
https://search.emarefa.net/detail/BIM-461588
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-461588