A (T,S) inventory/production system with limited production capacity and uncertain demands
Operations Research Letters
Computers and Operations Research
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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.