Abstract
This research examines the production control problem in two-station tandem queueing systems under time constraints. In these two-station tandem queueing systems, jobs must first be processed at the upstream station and then the downstream station. For each job, the sum of the waiting and processing time in the downstream queue is limited by an upper bound. This time constraint is called the process queue time constraint. When the process queue time constraint is violated, a significant scrap cost will be accrued. In this research, we develop a Markov decision model to study the production control problem under process queue time constraints. The objective is to minimise the sum of the expected long-run average inventory holding costs and scrap costs. According to the Markov decision model, an interesting exhaustive structure of the optimal production control policy is found. Based on this exhaustive structure, an efficient algorithm is developed to solve the production control problem numerically. The performance of the proposed algorithm is verified by a simulation study. Compared with other heuristics in the literature, the proposed algorithm can significantly reduce production costs while improving system throughput and utilisation. © 2010 Taylor & Francis.