Optimal production and inventory policy for multiple products under resource constraints Academic Article

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.

authors

• Arreola-Risa, Antonio

published proceedings

• MANAGEMENT SCIENCE

author list (cited authors)

• DeCroix, G. A., & Arreola-Risa, A.

citation count

• 80

complete list of authors

• DeCroix, GA||Arreola-Risa, A

publication date

• January 1998

publisher

• Institute for Operations Research and the Management Sciences (INFORMS)  Publisher

published in

• Management science  Journal

keywords

• Capacitated Production-inventory System
• Inventory-replenishment Policy
• Production-priority Policy

Digital Object Identifier (DOI)

• 10.1287/mnsc.44.7.950

start page

• 950

end page

• 961

volume

• 44

issue

• 7

URL

• http://dx.doi.org/10.1287/mnsc.44.7.950