Ordering policy for non-instantaneous deteriorating items in two warehouse environment with shortages

This paper deals with non‐instantaneous deteriorating items that have a shelf life and start deteriorating after a time lag. Under some special conditions, viz., attractive price discount, low storage cost, high demand, etc; the procurement of a large amount of such items at a time is decided. Because of the fixed capacity of the own warehouse (OW), a rented warehouse (RW) is used to store the excess quantity. Further, to enhance the usefulness of merchandise or goods, the first‐in first‐out (FIFO) dispatch policy is followed. In the present paper, a two‐warehouse inventory model for non‐instantaneous deteriorating items is developed under FIFO dispatch policy; shortages at OW are also allowed. The solution procedure has been illustrated with the help of a numerical example and a comprehensive sensitivity analysis is considered. Jaggi and Verma's (2010a) two‐warehouse LIFO model with non‐instantaneous deterioration is also compared with the proposed FIFO model.