An EPQ Inventory Model with Variable Holding Cost and Shortages under the Effect of Learning on Setup Cost for Two Warehouses

A two warehouse production inventory model for deteriorating items is explored in an inflation induced demand and partial backlogging under the effect of learning on set-up cost. Holding cost is treated as a linear function of time and production rate is taken as a linear combination of demand and on-hand inventory. A finite planning horizon inventory problem having two separate warehouses, one is an own warehouse (OW) and other a rented warehouse (RW) is developed with deterioration rate of the items to be different in different warehouses. Here it is assumed that the stocks of RW are transported to OW in continuous release pattern. Further, we use numerical example to illustrate the model and sensitivity analysis on some parameters is made.