Notations:
T number of periods in the planning horizon
Xt production scheduled for period t (t ¼ 1,2,y,T)
Dt expected demand in period t
It net inventory at the end of period t (I0 ¼ IT ¼ 0)
Ht(It) inventory cost in period t (concavefunction)
ct unit production cost at the beginning of period t