We investigate a production planning problem in a periodic review environment with variable production capacity, random yields, and uncertain demand. The implications of random yields and variable capacity for lot sizing previously have been explored separately, but not jointly. Many production...

Consider a manufacturer or wholesaler who supplies some item to retailers facing demand rates that depend on the shelf or display space that is devoted to that product by themselves and their competitors. The manufacturer, via the use of financial levers at her disposal, wishes to coordinate...