Optimal Inventory Policy for Perishable Products without Replenishment

Many products are perishable, and can be replenished in short term, for example, the vegetables. Therefore, it is important for wholesalers of such products to make right inventory decisions so that they can stock an appropriate amount of products and dynamically sell them at the right time with right quantity. In this paper, we try to address the optimal purchase and inventory control problem for a perishable product without replenishment based on the market condition and the perishable nature of product. Specifically, a two-period model is studied, and the optimal purchase policy and optimal inventory allocation policy are derived.