A two ware house inventory model for deteriorating items with stock dependent demand rate and holding cost

The present paper considers an extended (two warehouse) inventory model for a deteriorating product where the demand rate has been assumed to be a function of the on-hand inventory. The traditional cost parameters like unit item cost and replenishing cost are kept constant but the holding cost is treated as a functional form of the on hand inventory as described by Vander Veen (Introduction to the theory of operational research, Philips Technical Library, Springer, New York 1967) in his treatise on the subject. Approximate optimal solution has been derived and some computational results indicating the effects of such non-linearity in holding cost have also been presented. © 2009 Springer-Verlag.