Title: Two-warehouse inventory model for deteriorating items with linear trend in demand and shortages under inflationary conditions
Authors: Chandra K. Jaggi, Priyanka Verma
Addresses: Department of Operational Research, Faculty of Mathematical Sciences, New Academic block, University of Delhi, Delhi-110007, India. ' Department of Operational Research, Faculty of Mathematical Sciences, New Academic block, University of Delhi, Delhi-110007, India
Abstract: Inflation plays a very interesting and significant role: it increases the cost of goods. To safeguard from the rising prices, during the inflation regime, the organisation prefers to keep a higher inventory, thereby increasing the aggregate demand. This additional inventory needs additional storage space that is facilitated by a rented warehouse. Ignoring the effects of time value of money and inflation might yield misleading results. In the present study, a |two-warehouse inventory model with linear trend in demand under the inflationary conditions| has been developed. A rented warehouse (RW) is used to store the excess units over the capacity of the own warehouse (OW). The stock is being transferred from rented warehouse to own warehouse in a continuous release pattern with per unit transportation cost being factored in. The solution methodology provided in the model helps to decide on the feasibility of renting a warehouse. The results have been elucidated with numerical examples.
Keywords: inventory modelling; rented warehouses; deterioration; shortages; inflation; deteriorating items; warehouse renting.
International Journal of Procurement Management, 2010 Vol.3 No.1, pp.54 - 71
Published online: 02 Dec 2009 *Full-text access for editors Access for subscribers Purchase this article Comment on this article