A single period, single item fixed-life perishable inventory model with positive order lead times

One of the largest single investments a business enterprise can make is the investment in inventories. Current estimates for the total value of inventory holdings in the United States exceed 1 trillion dollars. Businesses have long understood the need to manage and control the level of inventory through the use of mathematical models.;Of considerable interest in recent years is the modeling of perishable inventories. A perishable item is any item that maintains its utility through a known finite lifetime. Examples of perishable items include whole blood, fresh fruits and vegetables, and medicines. With a single exception, all models for perishable inventories have assumed that once the items are ordered, they are received immediately, without an order lead time. This assumption is acceptable as long as the lifetime of the item is long, relative to the order lead time. However, many items do not meet this assumption.;In this dissertation we derive the necessary equations for computing the optimal order quantity for a perishable item with a lifetime of two periods, subject to a known positive order lead time. Optimal order quantities are computed for lead times up to four periods for three different demand distributions and three levels of demands as well as stationary and non-stationary demands. Properties of the optimal order quantities and areas for future research are identified.