Analysis of Two-Echelon Perishable Inventory System with Direct and Retrial demands

Abstract

In this paper, we consider a continuous review perishable inventory system with Markovian demand. The operating policies are (s, S) and (0,M). The life time of an item has an exponential distribution. The ordered items are received after a random time which is assumed to be exponential distribution. The demands that occur directly to the distribution centre are called direct demands. The arrival process for the direct demand follows Poisson process. The demand process to the retailer node is independent to the direct demand process and follows Poisson process. The demands that occur during stock out period are enter into the orbit of finite size. These orbiting demands retry for their demand after a random time, which is assumed to be exponential distribution. The joint probability distribution of the inventory level at lower echelon, higher echelon and the number of customer in the orbit is obtained in the steady state case. Various system performance measures in the steady state are derived and the long run total expected cost rate is calculated.