An inventory model for a system with multiple storage facilities and conditional credit facility

In the classical EOQ models it is implicitly assumed that the payment is made to the supplier immediately on the receipt of the goods. In practice this may not be true. Also it is implicitly assumed that the capacity of the warehouse is unlimited. In this paper an inventory model is developed for determining the economic order quantity of an item when delay in payment is permitted. It is assumed that the capacity of the warehouse is limited but rented warehouses are available. An algorithm for determining the economic order quantity is given and it is also illustrated by a numerical example.