A perishable inventory model with positive order lead times

In this paper we will derive the necessary equations to determine the single period, periodic review, optimal incoming quantity for a single product with a useful lifetime of two periods, subject to a known positive order lead time and a lost sales policy. Generalization to the multiperiod, finite horizon or the constrained optimization problem can be easily accomplished. Optimal order quantities for lead times up to four periods are computed for different levels of demands and for different demand distributions. The experimental results indicate that the order quantity is a function of the order lead time and the quantity of goods on-hand and on order.