This paper derives a good approach to approximating the
expected inventory level per unit time for the continuous
review (Q, r) perishable inventory system. Three existing
approximation approaches are examined and compared with
the proposed approach. Three stockout cases, including the
full backorder, the partial backorder, and the full lost
sales cases, which customers or material users generally
use to respond to a stockout condition are considered.
This study reveals the fact that the proposed approximation
is simple yet good and suitable for incorporation into the (Q, r)
perishable inventory model to determine the best ordering policy.
The results from numerical examples and a sensitivity analysis
indicate that severe underestimation or overestimation of the
expected inventory level per unit time due to the use of an
inappropriate approximation approach would result in great
distortion in the determination of the best ordering policy.