Performance analysis of a fluid production/inventory model with state-dependence

Oded Berman, David Perry, Wolfgang Stadje

Research output: Contribution to journalArticlepeer-review


We study the long-run average performance of a fluid production/ inventory model which alternates between ON periods and OFF periods. During ON periods of random lengths items are added continuously, at some state-dependent rate, to the inventory. During OFF periods the content decreases (again at some state-dependent rate) back to some basic level. We derive the pertinent reward functionals in closed form. For this analysis the steady-state distributions of the stock level process and its jump counterpart are required. In several examples we use the obtained explicit formulas to maximize the long-run average net revenue numerically.

Original languageEnglish
Pages (from-to)465-481
Number of pages17
JournalMethodology and Computing in Applied Probability
Issue number4
StatePublished - Dec 2007


  • EOQ
  • Fluid model
  • Long-run average revenue
  • Maximization
  • Production/inventory model
  • Reward functionals
  • State-dependent production rate
  • Stock-level process

ASJC Scopus subject areas

  • Statistics and Probability
  • General Mathematics


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