Critical number ordering policy for LIFO perishable inventory systems

This paper considers a stochastic perishable product inventory system characterized by LIFO (Last-In-First-Out) issuing, critical number ordering and a two-period lifetime. Exact and approximate closed form expressions for expected outdates are derived. The approximation, which is straightforward to compute, is shown to be accurate over a wide range of model parameters. The paper concludes by comparing optimal policies and expected costs in the LIFO system with the corresponding policies and costs in a system controlled by FIFO (First-In-First-Out) issuing.