Inventory Models for Perishable Items and Style Goods

  • Dinesh Shenoy
  • Roberto Rosas


The utility value of items such as blood, dairy products, flowers, fashion items, seasonal products, and several others drops to zero at some point in its lifetime. There are no buyers for these items after that point is reached. These items need to be managed differently. Due to relatively short selling period for such products, an inventory manager is required to carefully place a single procurement order of a certain size at the beginning of the period. Carefully, because revenue is lost if the order size is smaller than the demand, and loss is incurred if the demand is smaller than the order size. Models discussed in previous chapters may not really apply to this class of items. In this chapter, we discuss an inventory model – called single period inventory model or newspaper vendor model – that assumes demand for the items follows a known distribution (normal, uniform, Poisson) as well as those that do not fit any known distribution (discrete). A key assumption is that the inventory at the beginning of the period is zero. Toward the end of this chapter, we also discuss how this model could be extended to multiple periods by including a beginning inventory.


Perishable Items Style Goods Single Period Models Underage Cost Overage Cost Critical Ratio 


  1. Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., Cochran, J. J., Fry, M. J., & Ohlmann, J. W. (2016). An introduction to management science: Quantitative approaches to decision making (14th ed.). Boston: Cengage Learning.Google Scholar
  2. Monks, J. (1987). Operations management – Theory and problems. Singapore: McGraw-Hill International Edition.Google Scholar
  3. Nahmias, S. (2005). Production and operations analysis (5th ed.). Boston: McGraw-Hill International Edition.Google Scholar
  4. Nahmias, S. (2011). Perishable inventory systems. New York: Springer Science.Google Scholar
  5. Sheffi, Y. (2010). Single period inventory models, lecture notes. Cambridge, MA: Mass Institute of Technology.Google Scholar
  6. Silver, E. A., Pyke, D. F., & Peterson, R. (1998). Inventory Management and Production Planning and Scheduling, Third Edition, John Wiley & Sons, New York, NY.Google Scholar
  7. Jensen, P. A., & Bard, J. F. (2003). Operations research models and methods. Hoboken: Wiley.Google Scholar

Copyright information

© Springer International Publishing AG 2018

Authors and Affiliations

  • Dinesh Shenoy
    • 1
  • Roberto Rosas
    • 1
  1. 1.Tecnológico de MonterreyCampus LeónMexico

Personalised recommendations