Title: Two-warehouse inventory model for non-instantaneous deteriorating items with partial backlogging and permissible delay in payments under inflation

Authors: M. Palanivel; R. Uthayakumar

Addresses: Department of Mathematics, The Gandhigram Rural Institute, Deemed University, Gandhigram – 624 302, Dindigul, Tamil Nadu, India ' Department of Mathematics, The Gandhigram Rural Institute, Deemed University, Gandhigram – 624 302, Dindigul, Tamil Nadu, India

Abstract: In this paper, two-warehouse economic order quantity (EOQ) model for non-instantaneous deteriorating items with permissible delay in payments under the effect of inflation and time value of money is presented in which the demand is considered as a deterministic function of selling price and advertisement cost. Also in this model, shortages are allowed and partially backlogged. The backlogging rate is dependent on the waiting time for the next replenishment. This model aids in minimising the total inventory cost by finding the optimal intervals and the optimal order quantity. Furthermore, numerical examples are provided to illustrate the proposed model, sensitivity analysis of the optimal solutions with respect to major parameters is carried out and some managerial inferences are obtained.

Keywords: two-warehouse EOQ; economic order quantity; inventory modelling; deteriorating items; partial backlogging; permissible delay; payment delays; inflation; trade credit; inventory management; selling price; advertisement cost.

DOI: 10.1504/IJOR.2017.080595

International Journal of Operational Research, 2017 Vol.28 No.1, pp.35 - 69

Received: 07 Jul 2014
Accepted: 15 Jul 2014
Published online: 01 Dec 2016 *

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