Optimal Average Cost Policies for the Two-Terminal Shuttle

Rajat K. Deb and Charles P. Schmidt
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Rajat K. Deb: Lotus Consulting Group, Los Altos, California
Charles P. Schmidt: Department of Management Science and Statistics, University of Alabama, Tuscaloosa, Alabama 35487

Management Science, 1987, vol. 33, issue 5, 662-669

Abstract: In this paper we consider a transportation system consisting of a carrier with capacity Q \le \infty , operating between two terminals. Passengers arrive at these terminals according to independent Poisson processes and are transported by the carrier from one terminal to the other terminal. Under a fairly general cost structure we show that the optimal operating policy which minimizes the expected average cost is a monotone decreasing function of the number of customers waiting at each terminal. Bounds are derived for the optimal average cost policy and a method to compute these optimal policies using linear programming is presented.

Keywords: bulk queue; batch service; Markov decision process; optimal control (search for similar items in EconPapers)
Date: 1987
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