Deposit Design for a Production System with Impatient Customers
Most researchers who study make-to-stock production control systems either assume that all orders are eventually met (complete backordering) or that no customers are willing to wait (lost sales). In an actual manufacturing system, however, customers may queue in line but renege after some time due to impatience. To alleviate the loss in sales caused by the reneging behavior of impatient customers, deposits from the customers may be required by a production system. In this paper, an axial turbine blade production system with impatient customers and a deposit policy is modeled as an assembly queue network. We derive a mathematical model of system performance based on Markov chain methods, and we discuss the optimal deposit amount from the point of view of net profit optimization.
KeywordsImpatient customer Deposit Risk Optimization
The work described in this paper was supported by a Research Grant from the National Natural Science Foundation of China (70932004, 71002037, 71090404, 71090400), the Specialized Research Fund for the Doctoral Program of Higher Education (20090073110035, 20100073120080), and the Research Fund for the Key Scientific and Innovation Project of Shanghai Municipal Education Commission (09ZZ19).
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