Inventory policies for perishable items

Inventory simply means the goods and services that businesses hold in stock. However, there are several different types of inventory. Inventory of perishable product is one of them. Inventory control is the supervision of supply, storage and accessibility of items, in an optimum way for an organization. Inventory control is an important problem for many companies because, it is impossible to have an indefinitely supply on hand and on the other hand holding stock has a big cost.Perishable products have specific life time and cannot be used after its life is ended. For this reason, inventory control of perishable items requires different methods rather than that of durable products. The usage of perishable products is huge such as food industry and healthcare services (fresh foods, chemicals, blood and blood products etc.). Many inventory systems assume that life time is indefinitely. Hence, for perishable products inventory management unlike the traditional methods, some different methods have been used.The purpose of this study is to examine the inventory system for perishable products with two different policies; such as continuous review and periodic review. For this purpose, the continuous review approach is examined through a numerical study. Moreover, the system is analyzed by periodic review approach with similar assumptions. Mathematical formulas of cost functions and numerical results are obtained for different positive lead times with using MATLAB. As a result, the optimal order quantity determined which has minimum cost for each policy.