A two-level integrated production inventory model for perishable items in consideration of reprocessing

This paper deals with the problem that perishable items are not discarded or sold at reduced prices after reaching their expiration age, but are reprocessed to satisfy another kind of demand. Here presented is a two-level integrated production inventory model for the perishable item which is reprocessed into another kind of perishable item under the assumption that these two kinds of items have the inventory-level-dependent demand rate. The existence of a unique optimal solution for the model is proved. A simple solution procedure for finding the optimal policies is provided. A numerical example is also given.