We consider a production/inventory problem with stochastic seasonal de
mand. A scarce resource limits production in each time period, and set
up time is negligible. Linear and stationary costs are assessed for pr
oduction, holding inventory, and stock-outs. The calculation of optima
l solutions is difficult so heuristics are used. The heuristics used i
n business practice are shown to cost an average of 30% above optimal
policy costs. A superior heuristic is constructed utilizing an analyti
c approximation for optimal policies that costs an average of 2% over
optimal policy costs.