A two warehouse inventory model with preservation technology investment and partial backlogging

Abstract

In today’s global world preservation technology becomes very important due to rapid changes in environment. To study this concept, in this article we have developed the two warehouse inventory model with the consideration of preservation technology investment Demand rate is treated as linear function of instantaneous stock level. The limited storage area (OW) is used for the storage of the stock. The excess amount of stock than the capacity of the owned warehouse (OW) is stored in the rented warehouse (RW). The holding cost of rented warehouse is greater than the holding cost of owned warehouse (OW) so that stock of rented warehouse (RW) is used first and than the stock of (OW) is consumed. The shortages are allowed and partially backlogged under the effect of inflation. The main aim of this study is to find the optimal vale of total cost function. Numerical illustrations and sensitivity analysis are given at the end of this article.