A model of the optimal order policy of inventory system with perishable goods

This paper describes an equilibrium equation with a clear physical sense for the inventory model where the goods corrode easily. The state of the items deteriorates following an exponential distribution and the demand rate follows general renewal process. This paper also gives a concise method for looking for optimum solution of the model. We can calculate the objective function by a recurrence formula instead of needing to know all the state probabilities.