Here are the instructions I received from Redhat to set up a yum server for my Production servers not connected to the RedHat portal, hope this helps:
To set it up as a local yum repository in RHEL5:
https://access.redhat.com/site/solutions/328843
To update a small number of packages on a disconnected system that has packages installed that match a live system, it may be most straight forward to instruct the live system to keep updated packages which you can then transfer to the disconnected system:
Edit /etc/yum.conf and change the 'keepcache' parameter from 0 to 1:
keepcache=1
Downloaded packages will be found in the /var/cache/yum/*/packages directory.
Once they are transferred to the disconnected machine, you can use yum localinstall to install them:
# yum localinstall *.rpm
To clear downloaded packages and other cache information on the live system, use yum clear all:
# yum clear all