The rented warehouse is provided with better facility for the stock than the owned warehouse, but is charged more. The objective of this model is to find the best replenishment policies for minimizing the total appropriate inventory cost. A numerical illustration and sensitivity analysis are provided. | Yugoslav Journal of Operations Research 27 (2017), Number 1, 109-124 DOI: TWO WAREHOUSE INVENTORY MODEL FOR DETERIORATING ITEM WITH EXPONENTIAL DEMAND RATE AND PERMISSIBLE DELAY IN PAYMENT Naresh Kumar KALIRAMAN Banasthali University, Rajasthan, India Ritu RAJ Banasthali University, Rajasthan, India rrituiit@ Shalini CHANDRA Banasthali University, Rajasthan, India chandrshalini@ Harish CHAUDHARY Indian Institute of Technology, Delhi, India hciitd@ Received: April 2015 / Accepted: April 2016 Abstract: A two warehouse inventory model for deteriorating items is considered with exponential demand rate and permissible delay in payment. Shortage is not allowed and deterioration rate is constant. In the model, one warehouse is rented and the other is owned. The rented warehouse is provided with better facility for the stock than the owned warehouse, but is charged more. The objective of this model is to find the best replenishment policies for minimizing the total appropriate inventory cost. A numerical illustration and sensitivity analysis are provided. Keywords: Two Warehouse, Deteriorating Item, Exponential Demand Rate, Inventory Model, Permissible Delay in Payment MSC: 90B05. 110 , et al. / Two Warehouse Inventory 1. INTRODUCTION Inventory modeling is a mathematical approach to decide when to order, and how much to order so as to minimize the total cost. The effect of deterioration is applicable to most of the items, which cannot be neglected in inventory model. Generally, every firm has its own warehouse (OW) with a limited capacity. If the quantity exceeds the capacity of OW then, these quantities should be transferred to another, rented warehouse (RW). The customers are served first from RW, then from OW. The first two warehouse inventory model was developed by Hartley [8]. Sarma [30] developed the inventory model which included two levels of storage and the .
