Two-Warehouse Inventory Control for Deteriorating Items Using Hybrid and Stock-Dependent Demand with Partial Backlogging

The role of the shelf-life expiry date is crucial in inventory management. Food and medicines, among other products, are safe for human consumption only within their shelf lives. In this study, we established a deterministic inventory model for deteriorating items in two-warehouse systems with partial backlogs. This model considers the buyer’s demand rate for decaying items, which includes both a backlog component and hybrid demand dependent on the selling price and credit duration. We analyze a two-warehouse system where one warehouse is owned and the other is rented. The rental warehouse offers better preservation facilities compared to the owned warehouse. The rate of deterioration in the two warehouses may differ due to varying preservation conditions. To determine the optimal solution and function graph, we used Mathematica software. Finally, a sensitivity analysis was conducted to assess how variations in different factors affect the optimal strategy.