A good approximation of the inventory level in a (Q, r) perishable inventory system

Free access article

Issue		RAIRO Oper. Res. Volume 33, Number 1, January-March 1999


Page(s)		29 - 45
DOI		10.1051/ro:1999103

DOI: 10.1051/ro:1999103
RAIRO Rech. Opér. (vol. 33, n $^\circ$ 1, 1999, pp. 29-45)

A good approximation of the inventory level in a (Q, r) perishable inventory system

Huan Neng Chiu¹

Communicated by Shunji Osaki, received January 1996.

¹ Department of Industrial Management, National Taiwan University of Science and Technology, Taipei, Taiwan 106, Republic of China.

Abstract:

This paper derives a good approach to approximating the expected inventory level per unit time for the continuous review (Q, r) perishable inventory system. Three existing approximation approaches are examined and compared with the proposed approach. Three stockout cases, including the full backorder, the partial backorder, and the full lost sales cases, which customers or material users generally use to respond to a stockout condition are considered. This study reveals the fact that the proposed approximation is simple yet good and suitable for incorporation into the (Q, r) perishable inventory model to determine the best ordering policy. The results from numerical examples and a sensitivity analysis indicate that severe underestimation or overestimation of the expected inventory level per unit time due to the use of an inappropriate approximation approach would result in great distortion in the determination of the best ordering policy.

Résumé:

Cet article développe une bonne façon d'approximer le niveau moyen de stock par unité de temps pour le système d'inventaire permanent (Q, r) dans le cas des denrées périssables. Nous examinons trois approches existantes et les comparons avec celle qui est proposée ici. Nous considérons trois cas de ruptures de stock : celui du réapprovisionnement total, celui du réapprovisionnement partiel, et celui où toute demande non satisfaite est entièrement perdue ; ce sont les cas les plus généralement rencontrés. L'étude révèle que l'approximation proposée est simple, et cependant bonne et appropriée à une incorporation dans le modèle (Q, r) pour la détermination de la meilleure politique de réapprovisionnement. Les résultats des exemples numériques et une étude de sensibilité indiquent que d'une sous-estimation ou d'une surestimation sévère du niveau moyen du stock par unité de temps, causée par l'utilisation d'une méthode inappropriée d'approximation, résulterait une grande distorsion dans la détermination de la meilleure politique de réapprovisionnement.

Keywords: Perishable inventory, approximation, backorder, lost sales, sensitivity analysis.

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