TWO LEVELS OF STORAGE MODELS FOR DETERIORATINGITEMSWITHSTOCK DEPENDENT DEMAND AND SHORTAGES

Abstract

In this paper an inventory model for deteriorating products with two warehouse facility has been developed. The first warehouse is the owned warehouse and the second one is the rented warehouse. The deteriorationratein O.W. is a linear function of time and due to different preservation facility and storage environment thedeterioration rate in R.W. is assumed to be negligible and due to the same reason the holding cost in R.W. ishigher than the holding cost in owned warehouse. The Demand rate for the product is considered to be a stockdependent function. The stock transferred from rented warehouse to own warehouse follows a bulk release rule. Different examples with different demand rate, warehouse capacity and deterioration rate are also illustratedinthe model. In every case the optimal value of T.C., sales revenue and average net profit has been found. Withdifferent examples it is observed that the model is quite stable for different value of systemparameters. Theresults presented in this model are also interpreted graphically