Production planning with stochastic seasonal demand and capacitated production

摘要

We consider a production/inventory problem with stochastic seasonal demand. A scarce resource limits production in each time period, and setup time is negligible. Linear and stationary costs are assessed for production, holding inventory, and stock-outs. The calculation of optimal solutions is difficult sol heuristics are sued. The heuristics used in business practice are shown to cost an average of 30/100 above optimal policy costs. A superior heuristic is constructed utilizing an analytic approximation for optimal policies that costs an average of 2/100 over optimal policy costs.