The object of this paper is to investigate an inventory model of decaying items under (S,s) operating policy. Such systems have been studied extensively in the past under various (restrictive) assumptions. One set of papers deals with the stochastic process describing the inventory model of (S,s) type. Nahmias points out the need for a comprehensive analysis of (S,s) type inventory system with decaying items under reasonable assumptions like positive lead time, etc. The primary motivation of the paper is to fill this gap. Apart from meeting the objective of presenting a model with realistic assumptions, the present paper aims to discuss the solution procedure for a versatile inventory model for decaying items. This is achieved by incorporating adjustable reorder size in the classical inventory system of (S,s) type.
