The effect of information disclosure on the decision-making of strategic customers in a make-to-stock system with variable production rates

We consider a make-to-stock system with variable production rates. When the number of customers waiting in the system does not reach the threshold of N, the server produces at a low product rate. Once the number reaches N, the server switches to a high product rate. By formulating the problem as a queueing-game model, we study customers’ behavior strategies, as well as the server profit and social welfare. In scenarios where the information about production rate switching mechanism remains undisclosed, server profits are observed to be higher compared to disclosed scenarios. Undisclosed scenarios show a direct correlation between increased low production rates and higher profits, whereas disclosed scenarios demonstrate a peak in profits followed by a decline as the low production rate rises. Moreover, our analysis highlights a threshold effect concerning the low production rate and profit maximization. Initially, an increase in the low production rate has a positive impact on profits, but beyond a certain point, its negative effects outweigh the positives, leading to a decline in server profits. In addition, when the difference between the low and high production rates is substantial, concealing the switching mechanism information benefits both server profits and social welfare.