Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

Single-Period Model

A single-period inventory model describes a situation in which one order is placed for a product. At the end of the sales period, any remaining product has little or no value. This is a ­typical ­problem for Christmas trees, seasonal goods, bakery goods, newspapers, and magazines. (Indeed, this inventory issue is often called the “newsstand problem.”) In other words, even though items at a newsstand are ordered weekly or daily, they cannot be held over and used as inventory in the next sales period. So our decision is how much to order at the beginning of the period.

Single-period inventory model

A system for ordering items that have little or no value at the end of a sales period (perishables).

Because the exact demand ...