The Fixed-Charge Perishable Inventory Problem

Steven Nahmias
Additional contact information
Steven Nahmias: University of Pittsburgh, Pittsburgh, Pennsylvania

Operations Research, 1978, vol. 26, issue 3, 464-481

Abstract: This paper deals with the problem of determing both optimal and approximate ordering policies for a fixed-life perishable commodity when there is a fixed charge or set-up cost for placing an order. The structure of the optimal policy can be inferred from the analysis of a one-period model under the assumption that the outdating is paid for when the order arrives rather than when the outdating actually occurs. An approximate model is constructed for which ( s , S ) policies are optimal by approximating the one expected single-period cost and the transfer function. Two different bounds on the expected out-dating per period are used to obtain two different ( s , S ) approximations. Computations are performed for a discrete version of the problem with three different demand distributions and 24 configurations of the cost structure to compare the effectiveness of both approximations with the optimal policy.

Date: 1978
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://dx.doi.org/10.1287/opre.26.3.464 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:26:y:1978:i:3:p:464-481

Access Statistics for this article

More articles in Operations Research from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().