Problem of Resource Constrainted allocation and leveling in multi-stage, multi-product and multiperiod production planning is one of the most difficult and important-decision making problems. Variuos heuristic and optimal algorithms have been provided to solve the problem. In this paper, an effective approach is proposed to solve the problem for lot-size determination. This approach, through the Resource Constrainted allocation based on Lagrange multiplier, decomposes a mutli-product production planning problem to a single product production planning problem. After solving the single product mathematical model for each product, by comparing the allocated and required capacity for each product, total remained capacity is calculated and resource leveling is performed. Accordingly, after several stages, leveling of the remained capacities does not affect the problem solution. In this case, the primary problem solution is obtained. Experiments designed in this paper indicate the optimal usage of the Resource Constrainted by this approach and its superiority over Genetic Algorithm and Linear Programming methods.