Optimization Problem for Deteriorating Items Model with Stock Dependent Demand and Controllable Deterioration Under Two Warehouse Storage Facility

Abstract

In any inventory and production management, deterioration of physical goods is one of the important factors put into consideration. Therefore, it is very important to control and maintain inventories for decaying items. We considered inventory problem for deteriorating items where demand is stock dependent and deterioration is controllable under two warehouse storage facility, one of the warehouses is owned and the other one is rented. Goods are displayed in both warehouses but demands are met from the rented warehouse until the level of goods get to zero then demands are met from owned warehouse. We derived the optimal inventory management policies for the cases where; the demand is constant function, there is no investment in technology and there is no investment in technology and demand is also constant.