AN INVENTORY MODEL FOR DETERIORATING ITEMS WITH SHORTAGES AND INFLATION UNDER TWO STORAGE FACILITY

Abstract

In the present paper an inventory model is developed for deteriorating items under two storage capacity facilities. In many commercial activities there are the various reasons which forced the buyer to order more than the warehouse capacity. Such situation for additional storage space called rent ware house .For the excess quantity ware rent ware house is used. Demand rate is assumed to be a stock and time dependent with Noninstantaneous Time dependent deterioration rate. The methodology has been given to find out the optimal cycle time and ordering quantity with the total cost. Shortages at the owned warehouse are also allowed subject to partial backlogging. All cost components are affected by the both inflation and time value of money. Inflation plays major role it increases the cost of the goods. The solution methodology provided in the model helps to decide on the feasibility of renting a warehouse. Finally, findings have been illustrated with the help of numerical examples. Comprehensive sensitivity analysis has also been provided.