Reserve production capacity in a production inventory system

The paper discusses the function of reserve production capacity in a nonlinear single-item two-stage periodic review production inventorty system in which the production quantity is restricted within both the production capacity in each process and the available inventory quantity in semifinished product stock. It introduces the controllable parameter for reserve production capacity in each process in order to analyze the system by numerical experiments, and proposes a new rule of finished and semifinished production ordering.