Deterministic inventory model for deteriorating items with capacity constraint and time-proportional backlogging rate

Deterministic inventory model for deteriorating items with capacity constraint and time-proportional backlogging rate

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Article ID: iaor200966
Country: Netherlands
Volume: 178
Issue: 3
Start Page Number: 789
End Page Number: 807
Publication Date: May 2007
Journal: European Journal of Operational Research
Authors: , ,
Keywords: deteriorating items
Abstract:

In this paper, a deterministic inventory model for deteriorating items with two warehouses is developed. A rented warehouse is used when the ordering quantity exceeds the limited capacity of the owned warehouse, and it is assumed that deterioration rates of items in the two warehouses may be different. In addition, we allow for shortages in the owned warehouse and assume that the back­logging demand rate is dependent on the duration of the stockout. We obtain the condition when to rent the warehouse and provide simple solution procedures for finding the maximum total profit per unit time.

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