Maximizing the throughput (or revenue generation) rate has become one
of the most important criteria in the design and management of Flexibl
e Manufacturing Systems (FMSs). This paper develops dynamic part-alloc
ation policies for FMSs having finite storage capacity at each work st
ation. Maximizing the throughput rate means that the resulting queuein
g network model has a state-dependent arrival process; therefore, prod
uct-form solutions do not hold. Consequently, several alternative mode
ling approaches are described and formulated for deriving the optimal
part-routing policies. One of these optimal policies is based on a new
initiated-suspension part-routing strategy. This strategy results in
a reduced load on the material handling system while increasing the ex
pected throughput (or revenue generation) rates of the manufacturing w
ork stations. We also propose several efficient closed-loop heuristic
policies that exploit the response structure of the optimal policies.
These heuristic policies are of practical significance because they ar
e extremely easy to compute and to implement, while the resulting FMS
performance is nearly optimal.