Title :
Optimal Pricing and Production Control in an Assembly System With a General Stockout Cost
Author :
Keblis, Matthew F. ; Feng, Youyi
Author_Institution :
Macquarie Grad. Sch. of Manage., Macquarie Univ., Sydney, NSW, Australia
fDate :
7/1/2012 12:00:00 AM
Abstract :
We study the optimal control of an assembly system used to produce an assemble-to-order end product. We determine how to manage component production and end product price in order to maximize total discounted profit over an infinite horizon. We show the optimal production control is a state dependent base-stock policy and the optimal price adjustment is given by a threshold switching policy.
Keywords :
assembling; optimal control; optimisation; optimised production technology; pricing; profitability; stock control; assemble-to-order end product production; assembly system; component production management; end product price management; infinite horizon; optimal price adjustment; optimal production control; state dependent base-stock policy; stockout cost; threshold switching policy; total discounted profit maximization; Assembly systems; Equations; Optimal control; Process control; Production control; Silicon; Assemble-to-order; demand process management; dynamic pricing; optimal production control;
Journal_Title :
Automatic Control, IEEE Transactions on
DOI :
10.1109/TAC.2011.2178335
