The rolling horizon method has been proposed to address the integrated production planning and scheduling optimization problem. Since the method can generally result in small-scale optimization model and fast solution, it has been used in a number of applications in realistic industrial planning and scheduling problems. In this paper, it is first pointed out that the incorporation of valid production capacity information into the planning model can improve the solution quality in the rolling horizon solution framework. A novel method is then proposed to derive the production capacity information representing the detail scheduling model based on parametric programming technique. A heuristic process network decomposition strategy is further applied to reduce the computational effort needed for larger and more complex process networks. Several case studies have been studied, which illustrate the efficiency of the proposed methodology in improving the solution quality of rolling horizon method for integrated planning and scheduling optimization. (C) 2010 Elsevier Ltd. All rights reserved.