Abstract
We consider an M/G/1 queue in which the service rate is subject to control. The control is exercised continuously and is based on the observations of the residual workload process. For both the discounted cost and the average cost criteria we obtain conditions which are sufficient for a stationary policy to be optimal. When the service cost rate and the holding cost rates are non-decreasing and convex it is shown that these sufficient conditions are satisfied by a monotonic policy, thus showing its optimality.

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