Job Due-date Assignment with Earliness and Tardiness Penalties and Stochastic Arrival and Service Times

We consider the problem of assigning job due-dates when the objective is to minimise the total expected earliness and tardiness penalty. This type of problem is important because modern production and distribution systems discourage both tardy and early deliveries. This paper extends a general due-date policy, the so-called SL rule, to incorporate not only tardiness but also earliness. We provide optimal policy parameters for the linear and quadratic penalty cases in an M/M/1 system