Dynamic scheduling to minimize lost sales subject to set-up costs

We consider scheduling a shared server in a two-class, make-to-stock, close d queueing network. We include server switching costs and lost sales costs (equivalently, server starvation penalties) for lost jobs. If the switching costs are zero, the optimal policy has a monotonic threshold type of switc hing curve provided that the service times are identical. For completely sy mmetric systems without set-ups, it is optimal to serve the longer queue. U sing simple analytical models as approximations, we derive a heuristic sche duling policy. Numerical results demonstrate the effectiveness of our heuri stic, which is typically within 10% of optimal. We also develop and test a heuristic policy for a model in which the shared resource is part of a seri es network under a CONWIP release policy.