A two storage inventory model for deteriorating items with variable demand and partial backlogging

Abstract

The goal of this article is to develop a deterministic inventory model for single deteriorating items with two separate storage facilities (owned and rented warehouse, RW) due to limited capacity of the existing storage (owned warehouse, OW). The demand rate of the item is dependent on time, selling price of an item, and the frequency of advertisement in the popular electronic and print media and also through the sales representatives. The stocks of RW are transported to OW in continuous release pattern. Shortages, if any, are allowed and partially backlogged with a variable rate dependent on the duration of waiting time up to the arrival of next lot. The storage capacities of the warehouses are assumed to be limited (finite). According to the relative size of the storage capacities of warehouses, the different scenarios with subscenario have been mentioned for the stock level at initial and reorder points of the proposed inventory system. For each sub-scenario, the corresponding problem has been formulated as mixed integer nonlinear constrained optimization problem. For solving this problem, we have used GRG method. To illustrate the proposed model, a numerical example has been considered and solved. Finally, to perform the sensitivity analyses, the effects of changes of demand, deterioration, and backlogging parameters on the initial stock level, reorder point, cycle length, and frequency of advertisement along with the maximum profit of the system have been studied.

Economic Order Quality Model for Determining the Sales Prices of Fresh Goods at Various Points in Time

“…(b) * and * (0) both increased as the expiration time of the goods increased; the rate of change is shown in (32) and (29). (c) * and * (0) both decreased as the inventory cost ℎ increased; the rate of change is illustrated in (34) and (29). (d) * and * (0) both increased as the unit purchase price increased; the rate of change is depicted in (35) and (29).…”

“…The results revealed the following. (a) The optimal inventory cycle * and the initial inventory standard * (0) both increased as the setup cost increased; the rate of change is displayed in (31) and (29). (b) * and * (0) both increased as the expiration time of the goods increased; the rate of change is shown in (32) and (29).…”

“…(a) The optimal inventory cycle * and the initial inventory standard * (0) both increased as the setup cost increased; the rate of change is displayed in (31) and (29). (b) * and * (0) both increased as the expiration time of the goods increased; the rate of change is shown in (32) and (29). (c) * and * (0) both decreased as the inventory cost ℎ increased; the rate of change is illustrated in (34) and (29).…”

“…The assumption of the traditional EOQ model has been relaxed from "the demand rate is a given constant" to "the demand rate varies according to time" [13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32].…”

A study on inventory model with negative exponential demand and probabilistic deterioration under backlogging

“…Lee and Dye (2012) formulated inventory model with stock dependent demand and technology cost as one of the decision variables under the assumption of shortages and partial backlogging depending on the length of waiting time for next replenishment. The contribution of Tripati and , Bhunia et al (2015) for deteriorating items is significant. However, inventory model with probabilistic deterioration and negative exponential demand has not been reported yet.…”