Two-Warehouse Inventory Strategy of Deteriorating Items Based on Improved EOQ Model

With the continuous increase of per-capita income, people's demand for deteriorating items such as seafood and fruits is increasing with higher requirement for freshness, and their perishable and short sales cycle make retailers operating perishable products face new challenges in the market competition. This paper focuses on the perspective of retailers, supposing that the limited capacity of the retailer's own warehouse and allow shortage and partial backlogging, considering whether the supplier offers a price discount. On the purpose to minimize the cost of the retailer, this paper builds two-warehouse improved EOQ model based on traditional EOQ model, and obtained the optimal inventory strategies of the retailer under different models. Then, verify the effectiveness of the model by numerical analysis and sensitivity analysis, and compare the influence of considering price discounts or not on the two-warehouse inventory model of two types of deteriorating items to determine the optimal inventory decision minimizing unit cost for retailers.