An optimal inventory policy for deteriorating items with deterministic discrete demand

The relationship between supply and demand goes through the whole supply chain. Therefore it is important to study coordinating lot sizing between vendors and buyers. Many researchers have studied the relationship between suppliers and customers. They assume that demand is continuous and fluctuates with time. In this paper we develop an inventory model for deteriorating items with discrete demand for a finite time planning horizon. We also prove that the shortest-route algorithm can be used to find the optimal replenishment schedule. Furthermore, our results can be easily extended to multi-echelon inventory system with the combination of the obtained policy by former scholars.