A flow model of corporate activities with quality assurance

Hong Zhang, Saviour Worlanyo Akuamoah and Paul Georgescu

Physica A: Statistical Mechanics and its Applications, 2020, vol. 549, issue C

Abstract: We model a multi-divisional firm as a queueing system consisting in interconnected nodes, each project passing through queues, processing and quality assurance checks. It is assumed that the uptake of projects into processing is delayed by the availability of resources and by the size of the queue. The costs of delays are linearly dependent on queue lengths, assumption which is appropriate for short to medium stretches and instantaneous factors are assumed to account for the most significant costs, as opposed to long term discounting. Sufficient conditions for the existence, uniqueness and stability of the steady state, respectively, are determined via a matrix theory argument. We then find the optimal capacities, determining in the process an easily interpretable version of the optimality condition. Finally, the model is validated against real data from Damco Logistics Ghana Ltd. and it is seen that the profit would be maximized when the aggregate excess capacity is 71.8% of the aggregate optimal capacity during the data acquisition time.

Keywords: Queuing network; Quality assurance; Accommodation delay; Preprocessing delay (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:549:y:2020:i:c:s0378437120301825

DOI: 10.1016/j.physa.2020.124447

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