An EOQ model with two levels of storage when the quantity received is uncertain

This paper deals with a deterministic EOQ model when the quantity received is uncertain and less than what is ordered. To safeguard against a possible under-supply, the stockist often perfers to place orders for large quantities. However, it is possible that the quantity received may not differ much from the quantity ordered, and may lead to the problem of physical storage. Inventory models with two levels of storage have applications in such cases. The issues pertaining to the two levels of storage are discussed and a method of determining the EOQ is given along with numerical illustrations.