A Queueing Model to Analyze the Value of Centralized Inventory Information

Competitive pressures and technological improvements are leading many firms to consider centralized information systems to manage inventories and schedule production. We propose a simple model to explore the potential benefits of such coordination. The model represents two products competing for a single production facility. Simple Markovian behavior is assumed throughout. The key step in the analysis is the explicit solution of a queueing model with a novel priority discipline: Serve a customer from the class having the largest number of customers in the system.