The Optimal Policy of Production for Perishable Products during the Renewing Process

In this paper, we deal with the problem how to determine the optimal production quantity of the perishable products during the renewing process. The perishable products such as the mobile phones, CPUs as well as the computers often face the condition in which two generations of products coexist in the market. So the producer must make a production decision for two generation products. Considering the salvage values of products, the production quantity control model is proposed so as to maximize the enterprise revenues with the assumption of stochastic demand. We show that the optimal solution to the proposed model can be put forward. Furthermore a numerical example proves that the greater the demand for products during the renewing process is, the greater the optimal production quantity is.