An EOQ model for non-instantaneous deteriorating items with two levels of storage under trade credit policy

Abstract

A deterministic inventory model with two levels of storage (own warehouse and rented warehouse) with non-instantaneous deteriorating items is studied. The supplier offers the retailer a trade credit period to settle the amount. Different scenarios based on the deterioration and the trade credit period have been considered. In this article, we have framed two models considering single warehouse (Model-I) and two warehouses (Model-II) for non-instantaneous deteriorating items. The objective of this work is to minimize the total inventory cost and to find the optimal length of replenishment and the optimal order quantity. Mathematical theorems have been developed to determine the existence and the uniqueness of the optimal solution. Computational algorithms for the two different models are designed to find the optimal order quantity and the optimal cycle time. Comparison between the optimal solutions for the two models is also given. Numerical illustrations and managerial insights obtained demonstrate the application and the performance of the proposed theory.