Optimization Of Emergency Inventory Replenishment Of A Perishable Product

Abstract

Profitability of an additional replenishment cycle in an inventory system with a perishable product with deterministic shelf life, Poisson demand process, and fixed replenishment lead time is studied. Formulae for calculating income and expenses in the system are obtained. Behaviour of the net income as a function of ordering moment and order quantity is analyzed and an approach for determining parameter values that maximize net income is proposed.