On the inventory of high technology products under conditions of decay

The advent of the micro-computers and other high technology products with its supporting hardware/software components has been paralleled with a significant increase in the number of distribution outlets. Each commercial outlet has to carry a certain amount of inventory so as to provide a proper service to its customers. However, due to the fast change in the technology involved, numerous inventory items become obsolete at an accelerating rate. The same case applies to manufacturers of high tech equipment such as programmable computers, visual inspection systems, robots, etc. As long as the “Kanban” (Just-in-Time) inventory system has not been adopted, the organization is faced with this problem. The problem can be treated as a perishable inventory problem. In this paper the analogy is developed and expressions for the required stock level are presented.