A finite horizon production model with variable production rates and constant demand rate

In this paper we present a finite horizon single product single machine production problem. Demand rate and all the cost patterns do not change over time. However, end of horizon effects may require production rate adjustments at the beginning of each cycle. It is found that no such adjustments are required. The machine should be operated either at minimum speed (i.e. production rate = demand rate; shortage is not allowed), avoiding the buildup of any inventory, or at maximum speed, building up maximum inventories that are controlled by the optimal production lot size.