PRODUCING MULTIPLE PRODUCTS WITH STOCHASTIC SEASONAL DEMAND AND CAPACITY LIMITS

Capacity limitations for manufacturers of seasonally demanded goods cr eate difficult problems for both practitioners and researchers. Empiri cal data suggest that practitioner response is far from optimal. Optim al solutions, however, are precluded for realistic problems due to com putational complexity. Here, the structure of optimal policies is expl ored and heuristics based on myopic policies are developed. For simple problems, the best heuristic deviates from optimality by an average o f 2.5% over a variety of conditions. Heuristics are also compared unde r more realistic business conditions by simulation.