We have studied the optimal server allocation policies for a tandem queueing system under different system settings. Motivated by an industry project, we have studied a two stage tandem queueing system with arrival to the system and having two flexible servers capable of working at either of the stations. In our research, we studied the system under two different circumstances: modeling the system to maximize throughput without cost considerations, modeling the system to include switching and holding costs along with revenue for finished goods. In the maximizing throughput scenario, we considered two different types of server allocations: collaborative and non-collaborative. For the collaborative case, we identified the optimal server allocation policies for the servers and have proved the structure of the optimal server allocation policy using mathematical iteration techniques. Moreover, we found that, it is optimal to allocate both the servers together all the time to get maximum throughput. In the non-collaborative case, we have identified the optimal server allocation policies and found that it is not always optimal to allocate both the servers together.

With the inclusion of costs, we studied the system under two different scenarios: system with switching costs only and system having both switching and holding costs. In both the cases, we have studied the optimal server allocation policies for the servers. Due to the complicated structure of the optimal server allocation policy, we have studied three different heuristics to approximate the results of the optimal policy. We found that the performance of one of the heuristics is very close to the optimal policy values.