Xin Pan, Jie Song, et al.
CASE 2017
We consider joint capacity–inventory management for multi-server make-to-stock queues operating under a base stock policy. The number of servers corresponds to the capacity decision, and the base stock level is the inventory decision. Our goal is to minimize a combination of capacity, inventory, and backordering costs. We develop a square-root rule for the joint decision and justify the rule analytically in a many-server queue asymptotic framework. We demonstrate the accuracy of the square-root rule, first via our derivation and numerical assessment of a novel corrected diffusion approximation and then more directly by conducting extensive numerical experiments. Finally, we provide operational insights into the trade-offs involved in such joint management problems, through various analysis based on the square-root rule as well as a comparison with analogous results for single-server make-to-stock queues.
Xin Pan, Jie Song, et al.
CASE 2017
Bo Zhang, Johan S.H. Van Leeuwaarden, et al.
Operations Research
Samim Ghamami, Bo Zhang
Journal of Credit Risk
Angela Schörgendorfer, Peter M. Van De Ven, et al.
ACM SIGMETRICS Performance Evaluation Review