Abstract

SCHULER [1970] developed a production control model in which demand occurs in a batch at the end of a fixed production period, but nonconvex and noncontinuous cost functions are admitted. SCHULER’s approach is extended here for holding costs and the possibility of continuous capacity adjustment. The model leads to an optimal control problem with a system equation linear in the control variable. For such problems we prove on certain assumptions that the control variables of an optimal policy take only values for which the cost function and its convex hull coincide.

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