ACTUARIAL VALUATION OF PERISHABLE INVENTORY SYSTEMS

Authors:
Steven Nahmias;David Perry;Wolfgang Stadje
Affiliations:
Operations and Management Information Systems, Santa Clara University, Santa Clara, California 95053-0382, E-mail: snahmias@scu.edu;Department of Statistics, University of Haifa, 31905 Haifa, Israel, E-mail: dperry@stat.haifa.ac.il;Fachbereich Mathematik/Informatik, University of Osnabrück, 49069 Osnabrück, Germany, E-mail: wolfgang@mathematik.uni-osnabrueck.de
Venue:
Probability in the Engineering and Informational Sciences
Year:
2004

Citing 6
Cited 1

An application of the theory of weak convergence to the dynamic perishable inventory problem with discrete demand

Mathematics of Operations Research
A perishable inventory system with modified (S — 1, S) policy and arbitrary processing times

Computers and Operations Research
Clearing Models for M/G/1 Queues

Queueing Systems: Theory and Applications
Analysis of a Sampling Control Scheme for a Perishable Inventory System

Operations Research
Inventory systems for goods with censored random lifetimes

Operations Research Letters
Busy period analysis for M/G/1 and G/M/1 type queues with restricted accessibility

Operations Research Letters

Control Policies For Inventory Systems With Perishable Items: Outsourcing And Urgency Classes

Probability in the Engineering and Informational Sciences

Quantified Score

Hi-index	0.00

Visualization

Abstract

The aim of this article is to derive the income and cost functionals required to determine the actuarial value of certain types of perishable inventory system. In the basic model, the arrival times of the items to be stored and the ones of the demands for those items form independent Poisson processes. The shelf lifetime of every item is finite and deterministic. Every demand is for a single item and is satisfied by the oldest item on the shelf, if available. The price of an item depends on its shelf age. For an actuarial valuation, it is important to know the distribution of the total value of the items in the system and the expected (discounted) total income and cost generated by the system when in steady state. All of these functionals are determined explicitly. As extensions of the original model, we also deal with the case of batch arrivals and general renewal interdemand times; in both cases, closed-form solutions are obtained.