Kaon production in pion-nucleon collisions in nuclear matter is studied in the resonance model. To evaluate the in-medium modification of the reaction amplitude as a function of the baryonic density we introduce relativistic, mean-field potentials for the initial, final and intermediate mesonic and baryonic states. These vector and scalar potentials were calculated using the quark-meson coupling (QMC) model. The in-medium kaon production cross sections in pion-nucleon interactions for reaction channels with $Lambda$ and $Sigma$ hyperons in the final state were calculated at the baryonic densities appropriate to relativistic heavy ion collisions. Contrary to earlier work which has not allowed for the change of the cross section in medium, we find that the data for kaon production are consistent with a repulsive $K^+$-nucleus potential.
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