Optimal lot size for a perishable good under conditions of finite production and partial backordering and lost sale

Perishable products constitute a sizable component of inventories. A common question in a reselling situation involving a perishable (or a non-perishable) product is: what should be the size of the replenishment? When a product is highly perishable, the demand may need to be backlogged to contain costs due to deterioration. In this sense, perishability and backlogging are complementary conditions. In this paper we consider the problem of …