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Abstract In this article we shall consider a model of an integrated production-inventory system recently proposed by Axsäter, This model concerns the behavior of a production system in which a number of products are produced by means of a set of facilities. The objective for us will be to interpret the model in terms of the theory of relatively closed systems (Grubbström, 1972; Grubbström and Lundquist, 1975) and thereby to show that the model may be formulated in this language and that this theory might cast some light upon the dynamic and structural relationships involved in the model. The theory has previously been applied to Walrasian economic systems and to decentralized decision making (Grubbström, 1976; Grubbström and Lundquist, 1975), and recently to hierarchical managerial systems (Lundquist, 1977).
Grubbström et al. (Sat,) studied this question.