A two-warehouse inventory model for deteriorating items under permissible delay in payment with partial backlogging

• Developed a two warehouse inventory model for deteriorating items.
• Alternative formulation of model for permissible delay in payments.
• Consideration of partially backlogged shortage.

This paper deals with an inventory model for single deteriorating item with two separate warehouses (one is OW and other is RW) having different preserving facilities. Demand is assumed to be known and constant. Shortages are allowed and partially backlogged with a rate dependent on the duration of waiting time up to the arrival of next lot. Here, we have considered the permissible delay in payments. However, the model formulation is different rather than that of existing models. Accordingly, several realistic cases, sub cases and scenarios have been taken into account and the corresponding problems have been formulated as non-linear constrained optimization problems along with the solution procedure. Further, to illustrate the model and also to test the validity of the same, two numerical examples have been solved. Finally, considering first example, sensitivity analyses have been performed to study the effects of changes of different parameters, like demand, ordering cost and own warehouse capacity on optimal policies.