Two-warehouse inventory model for deteriorating items with random dispatching policy under supplier’s trade credit
摘要
In the present competitive market where trade credit and/or discounts plays significant role in stimulating demands, retailers are usually involved in placing bulk orders more than the stocking capacity of their own warehouse (OW) which necessitate renting another warehouse (RW) to keep the excess. In those studies, Last-in First-out (LIFO) or First-in First-out (FIFO) dispatching policies of the items stocked are considered by the retailer due to economic reasons or freshness of the items respectively. However, there are situations when neither economic reasons nor freshness of items can be given priority. As such, it is better to consider them simultaneously. Hence, goods are sold randomly from the two warehouses concurrently. In this study, dispatching policy in no particular order (random) was considered when the warehouses have different capacity and situated in different but close locations. Gradient method was used to show the existence and uniqueness of the optimal solution of each of the cost functions. Furthermore, using Newton–Raphson iterative technique, the solution to the numerical examples that serve as illustration of the model was obtained. The result shows that the least total relevant cost occurs when the demand in the OW is less than that in the RW. From the sensitivity analysis’s result, it shows that increase in