Optimal ordering policies for continuous review perishable inventory models.

Abstract

This paper extends the notions of perishable inventory models to the realm of continuous review inventory systems. The traditional perishable inventory costs of ordering, holding, shortage or penalty, disposal and revenue are incorporated into the continuous review framework. The type of policy that is optimal with respect to long run average expected cost is presented for both the backlogging and lost-sales models. In addition, for the lost-sales model the cost function is presented and analyzed.