Two-warehouse inventory model with ramp-type demand and partially backlogged shortages

Abstract

In this article, we consider an inventory model for items that are stored in two-warehouses when demand is a general ramp-type function of time. Shortages are allowed and a constant fraction of shortages is backlogged. The existence and uniqueness of optimal solution is proved for both – the single-warehouse and the two-warehouse models. An algorithm is developed to facilitate the choice between the two-warehouse and the single-warehouse systems and hence to obtain the optimal replenishment policy. Numerical examples are presented. Sensitivity analysis with respect to the parameters of the model is performed.

Keywords:

• inventory
• ramp-type demand
• two-warehouses
• partially backlogged shortages

Acknowledgement

The authors are thankful to the reviewers for their thoughtful suggestions.