A Two-warehouse Inventory Model for Deteriorating Items with Permissible Delay under Exponentially Increasing Demand

Abstract

In this study, a two-warehouse inventory model with exponentially increasing trend in demand involving different deterioration rates under permissible delay in payment has been studied. Here the scheduling period is assumed to be a variable. The objective of this study is to obtain the condition when to rent a warehouse and the retailer's optimal replenishment policy that minimizes the total relevant cost. An effective algorithm is designed to obtain the optimal solution of the proposed model. Numerical examples are provided to illustrate the application of the model.Based on the numerical examples, we have concluded that the single warehouse model is less expensive to operate than that of two warehouse model. Sensitivity analysis has been provided and managerial implications are discussed.