We present a model of parallel Lévy-driven queues that mix their output into a final product; whatever cannot be mixed is sold on the open market for a lower price. The queues incur holding and capacity costs and can choose their processing rates. We solve the ensuing centralized (system optimal) and decentralized (individual station optimal) profit optimization problems. In equilibrium the queues process work faster than desirable from a system point of view. Several model extensions are also discussed.
Bibliographical notePublisher Copyright:
© 2019 Elsevier B.V.
- Capacity allocation
- Coupled queues
- Lévy driven queues
- Non-cooperative games
ASJC Scopus subject areas
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
- Applied Mathematics