A multi-warehouse inventory model for items with time-varying demand and shortages

A multi-warehouse inventory model for items with time-varying demand and shortages

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Article ID: iaor20042446
Country: United Kingdom
Volume: 30
Issue: 14
Start Page Number: 2115
End Page Number: 2134
Publication Date: Dec 2003
Journal: Computers and Operations Research
Authors:
Keywords: supply chain
Abstract:

This paper develops a deterministic replenishment model with multiple warehouses (one is an owned warehouse and others are rented warehouses) possessing limited storage capacity. In this model, the replenishment rate is infinite. The demand rate is a function of time and increases at a decreasing rate. The stocks of rented warehouses are transported to owned warehouses in continuous release pattern. The model allows shortages in owned warehouse and permits part of the backlogged shortages to turn into lost sales – which is assumed to be a function of the currently backlogged amount. The solution procedure for finding the optimal replenishment policy is shown. As a special case of the model, the corresponding models with completely backlogged shortages and without shortages are also presented. The models are illustrated with the help of numerical examples. Sensitivity analysis of parameters is given in graphical form.

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