| Article ID: | iaor198992 |
| Country: | United States |
| Volume: | 37 |
| Issue: | 3 |
| Start Page Number: | 404 |
| End Page Number: | 409 |
| Publication Date: | May 1989 |
| Journal: | Operations Research |
| Authors: | Rosenfield Donald B. |
| Keywords: | production |
This paper deals with the problem of disposal of slow-moving or obsolete inventory. For many reasons, companies will find themselves in an overstock situation where the potential sales value of excess stock, less the expected storage costs, does not match the salvage value. The paper presents relationships for the optimum number of items to keep under conditions of stochastic demand and perishing.