A Note on Capacitated Periodic Review Production Models

Abstract

Although the production/inventory literature has investigated the capacitated periodic production systems, and showed that the optimal policy is of the modified order-up-to type, the issue of computing the optimal order-up-to level remained unanswered. In this paper, we show that the optimal order-up-to level can be computed by using a convergence theorem. In addition, we compare it to the ordinary order-up-to level for periodic production systems with unlimited capacity. We believe that the proposed method can be immediately applied in practice.