We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Postponable Acceptance and Assignment: A Stochastic Dynamic Programming Approach.
- Authors
Kang, Keumseok; Shanthikumar, J. George; Altinkemer, Kemal
- Abstract
We study a new dynamic order acceptance and assignment problem of a make-to-order manufacturing or service system that produces heterogeneous products or services using heterogeneous servers. Unlike traditional dynamic order acceptance and assignment problems, in our settings the system can strategically postpone acceptance and assignment decisions for orders in hand. The system does this while waiting for more profitable orders to come and/or more productive servers to become available, with the risk of losing orders in hand, low server utilization, and high waiting penalties. We formulate this problem as a stochastic dynamic program, characterize the structure of the optimal policy, and discuss managerial insights gained from the optimal policy. The paper also provides a methodological contribution by finding general structural properties and their preservation conditions, which can be reused in related future operations management studies.
- Subjects
MAKE-to-order (Manufacturing); OPERATIONS management; PROFITABILITY; DYNAMIC programming; STOCHASTIC analysis; DECISION making
- Publication
M&SOM: Manufacturing & Service Operations Management, 2016, Vol 18, Issue 4, p493
- ISSN
1523-4614
- Publication type
Article
- DOI
10.1287/msom.2016.0581