Optimal Control of a Tandem Queue with Blocking

Abstract We consider a two-station tandem queue with no intermediate buffer. Jobs at the first station may be blocked when the following station is occupied by another job. The objective is to control the arrival and department processes, subject to some capacity limits, so that an expected discounted profit function is maxmized. We prove that the optimal control policy is of a threshold type, and the characterization of the threshold is provided.