Optimal Production and Inventory Policy for Multiple Products Under Resource Constraints Academic Article uri icon

abstract

  • We show that a modified base-stock policy is optimal for multiproduct, infinite-horizon production-inventory systems, where demand for the products is random and the products share a finite resource every period. We characterize the optimal policy for the case of homogeneous products. Because of the difficulty in computing the optimal base-stock levels for the heterogeneous case, we propose a heuristic that is simple enough for practical applications. We present numerical results that suggest that the heuristic yields near-optimal solutions.

author list (cited authors)

  • DeCroix, G. A., & Arreola-Risa, A.

citation count

  • 68

publication date

  • July 1998