 Optimal Prices of an M/G/1 JobshopSøren Glud Johansen
Operations Research, 1994, vol. 42, issue 4, 765-774 Abstract: This paper concerns the optimal control of input to a FIFO jobshop with a single workstation. The input is jobs for which the processing and delivery times are observable upon arrival. The control is exercised by charging a price for each completed job. The objective is either profit maximization or welfare maximization. The semi-Markov decision processes that maximize the two objectives are studied simultaneously. Optimal prices are specified in terms of opportunity costs. The opportunity cost of a job is the expected future loss of earnings caused by having the job submitted to the shop. Results for the cases with and without discounting are established simultaneously by a new approach. It is based on the idea of studying the infinite-horizon model directly and it allows the state space and the decision set to be denumerable. Mild assumptions ensure that the opportunity cost is increasing as a function of the work backlog, and increasing and convex as a function of the processing time. Keywords: cost analysis: opportunity costs of a jobshop; transfer pricing; dynamic programming/optimal control; semi-Markov: infinite state space; infinite decision set; α-optimal; queues; optimization: input control by charging prices (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:42:y:1994:i:4:p:765-774 Access Statistics for this article More articles in Operations Research from INFORMS Contact information at EDIRC. |
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