Abstract
A continuous review perishable inventory model based on approximations to the expected outdating, the expected shortage quantity, and the expected inventory level is developed to determine a best ( Q, r) ordering policy under a positive order leadtime when the total expected average cost per unit time is minimized. The approximation method is simple and verified by a comparison with the Weiss model. The results reveal that the mean absolute deviation from the optimal total expected average cost per unit time is only 0.58%. This paper also compares the proposed model to the conventional model with no perishability. A value is given to the item lifetime indicating when an approximate answer approaches closely to the conventional ordering policy. Finally, a simulation model written in SIMSCRIPT II.5 is used to validate the approximate results.
Published Version
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