STOCHASTIC OPTIMAL CONTROL OF ATO SYSTEMS WITH BATCH ARRIVALS VIA DIFFUSION APPROXIMATION

Wanyang Dai, Qian Jiang
2007 Probability in the engineering and informational sciences (Print)  
We study the stochastic optimal control for an assemble-to-order system with multiple products and components that arrive at the system in random batches and according to renewal reward processes. Our purpose is to maximize expected infinite-horizon discounted profit by selecting product prices, component production rates, and a dynamic sequencing rule for assembly. We refine the solution of some static planning problem and a discrete review policy to batch arrival environment and develop an
more » ... t and develop an asymptotically optimal policy for the system operating under heavy traffic, which indicates that the system can be approximated by a diffusion process and exhibits a state space collapse property.
doi:10.1017/s0269964807000095 fatcat:ivroab5z6nct5fognunpbp55li