An optimal replenishment policy for items with inventory-level-dependent demand and fixed lifetime under the Last In First Out policy

In a recent paper, Hwang and Hahn considered inventory replenishment problems for an item with an inventory-level-dependent demand rate and a fixed lifetime. They developed an economic order quantity model under the situation of considering the first-in-first-out (FIFO) issuing policy. First, this paper reconsiders Hwang and Hann's problem by employing the last-in-first-out (LIFO) issuing policy, which is more practical in the retail industry. An inventory model is developed. Secondly, the concavity of the objective function is proved. Thirdly, this paper presents conditions where the present model has a unique optimal solution and a method for finding the global optimal solution. A simple solution procedure and sensitivity analyses of parameters are also provided.