A Two-Warehouse Inventory Model for Maximum Lifetime Items Under Supplier's Trade Credit

Abstract

In this study, an inventory model is developed considering deteriorating items that have maximum lifetime in a two-warehouse environment. The dispatching policy adopted is First -in First -out (FIFO) against Last-in First-out (LIFO) due to the fact that freshness of items is considered more important than economic reasons. Trade credit was incorporated into the model to make it more practical. With the help of several realistic cases, cost functions were obtained and as well as numerical example is given as an illustration of the model. From sensitivity analysis, it was found that the bigger the lifetime of an item, the smaller the total cost incurred by the retailer.