NEAR MYOPIC HEURISTICS FOR THE FIXED-LIFE PERISHABILITY PROBLEM

This paper details the application of a class of heuristics to the Fix ed-life Perishability Problem formulated by Nahmias (1975a) and Fries (1975). Various assumptions for this model include i.i.d. demand, line ar ordering, holding and penalty costs. Goods have a known fixed lifet ime and perished goods cause a linear outdating cost to be incurred. T he approach we use, that of developing heuristics from 'near myopic' b ounds, involves viewing periodic inventory problems in the framework o f the classic ''newsboy'' model. We exploit various properties of the problem under consideration to derive tight bounds on the newsboy para meters, thus leading to efficient bounds on the order quantities. Comp utational studies reveal that the heuristic policies are near optimal, and are easy to compute.