Continuous review (s, Q) inventory system with random lifetime and two demand classes

UZUNOĞLU KOÇER U. Z., Yalcin B.

OPSEARCH, vol.57, no.1, pp.104-118, 2020 (ESCI) identifier identifier

  • Publication Type: Article / Review
  • Volume: 57 Issue: 1
  • Publication Date: 2020
  • Doi Number: 10.1007/s12597-019-00393-0
  • Journal Name: OPSEARCH
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus, ABI/INFORM, INSPEC, zbMATH
  • Page Numbers: pp.104-118
  • Keywords: Markov process, Perishable inventory, Two demand classes, Random lifetime, Random lead time, LOST SALES, MODEL, POLICIES
  • Dokuz Eylül University Affiliated: Yes

Abstract

This paper examines a continuous review inventory model for perishable items with two demand classes. Demands for both classes occur according to Poisson process. The items in inventory are perishable products and have exponential lifetimes. The time after placing an order is an exponential random variable. When the on-hand inventory drops to pre-specified level s, only the priority customer demands are met whereas the demands from ordinary customers are lost. And also, the demand occurring stock-out periods are lost. The inventory system is characterized by continuous-time Markov process and steady-state probabilities are derived. The expected cost function is formulated and a numerical study is provided for optimization.