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 noteFunding Information:
Offer Kella was supported in part by grant 1647/17 from the Israel Science Foundation and the Vigevani Chair in Statistics, Israel; Onno Boxma and Liron Ravner were supported by the NWO, Netherlands Gravitation Project NETWORKS, Grant Number 024.002.003.
© 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