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Performance Analysis of a Fluid Production/Inventory Model with State-dependence

Author

Listed:
  • Oded Berman

    (University of Toronto)

  • David Perry

    (University of Haifa)

  • Wolfgang Stadje

    (University of Osnabrück)

Abstract

We study the long-run average performance of a fluid production/ inventory model which alternates between ON periods and OFF periods. During ON periods of random lengths items are added continuously, at some state-dependent rate, to the inventory. During OFF periods the content decreases (again at some state-dependent rate) back to some basic level. We derive the pertinent reward functionals in closed form. For this analysis the steady-state distributions of the stock level process and its jump counterpart are required. In several examples we use the obtained explicit formulas to maximize the long-run average net revenue numerically.

Suggested Citation

  • Oded Berman & David Perry & Wolfgang Stadje, 2007. "Performance Analysis of a Fluid Production/Inventory Model with State-dependence," Methodology and Computing in Applied Probability, Springer, vol. 9(4), pages 465-481, December.
    • Handle: RePEc:spr:metcap:v:9:y:2007:i:4:d:10.1007_s11009-006-9000-8
    DOI: 10.1007/s11009-006-9000-8
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    References listed on IDEAS

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    Cited by:

    1. Yonit Barron, 2016. "Performance analysis of a reflected fluid production/inventory model," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 83(1), pages 1-31, February.
    2. Yonit Barron, 2016. "Performance analysis of a reflected fluid production/inventory model," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 83(1), pages 1-31, February.

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