A two warehouse inventory model for deteriorating items with variable demand under alternative trade credit policy

In this paper, we have developed an inventory model for single deteriorating items with two separate storage facilities (own and rented warehouses) due to limited capacity of the existing storage, i.e., own warehouse considering allowable delay in payment. The demand rate of this item is dependent on continuous time, selling price of the item and the frequency of advertisement. Partially, backlogged shortages are allowed with a rate dependent on the duration of waiting time up to the arrival of next lot. To formulate the model, we have considered different realistic situations. The corresponding problem has been formulated as constrained nonlinear mixed integer problem and solved by generalised reduced gradient (GRG) method. Finally, a numerical example has been considered to illustrate and validate the model. Sensitivity analyses have been carried out by changing one parameter at a time and keeping the other at their original value.