An Analysis of Alternative Policies for the Issue of Commodities from Stores

Abstract

When the useful life of a commodity in the field (the field life) is affected by the time which the commodity spends in store prior to issue (the store age), it is possible to show that there is an optimum sequence for issuing a given number of items of this commodity from the store, when it is desirable to maximize their total useful life in the field. Two common issuing policies are FIFO (first in first out) and LIFO (last in first out) and it is shown that one of these policies becomes optimal, depending on the characteristics of the field life function, i.e. on the relationship between the useful life of a commodity in the field and its store age prior to issue. Attention is drawn to the risk of obsolescence, when items in the store cease to be useful owing to excessive storage periods, and the effect of this factor on the above two policies for issuing items from store is discussed. The cost of implementing these policies and problems relating to acquisition or replenishment of commodities for a stock-pile of two units are considered and the conditions under which each policy becomes less costly to apply are stated