We investigate the impact of the effective lifetime of items in an age-based control policy for perishable inventories, a so-called (Q, r, T) policy, with positive lead time and fixed lifetime. The exact analysis of this control policy in the presence of the service level constraint is provided by Tekin et al. (2001) under the restriction that the aging process of a batch begins when it is unpacked for consumption, and that at most one order can be outstanding at any time. In this work, we generalize their results to allow for more than one outstanding order and assume that the aging process of a batch starts since the time that it is ordered. Under this aging process, we derive the effective lifetime distribution of batches at the beginning of embedded cycles in an embedded Markov process. We provide the operating characteristic expressions and construct the cost rate function by the renewal reward theorem approach. We develop an exact algorithm by investigating the cost rate and service level constraint structures. The proposed policy considerably dominates its special two-parameter policies, which are time-dependent (Q, T) and stock-dependent (Q, r) policies. Numerical studies demonstrate that the aging process of items significantly influences the inventory policy performance. Moreover, allowing more than one outstanding order in the system reaps considerable cost savings, especially when the lifetime of items is short and the service level is high.
Poormoaied, S., Gürler, Ü., & Berk, E. (Geaccepteerd/In druk). An Exact Analysis on Age-based Control Policies for Perishable Inventories. IISE Transactions. https://doi.org/10.1080/24725854.2020.1785649