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The Optimal Cycle Time For Deteriorating Items With Limited Storage Capacity Under Permissible Delay In Payments

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  • KUN-JEN CHUNG

    (Graduate School of Management, Chung Yuan Christian University, Chung Li, Taiwan, ROC)

  • TIEN-SHOU HUANG

    (Department of Information Management, National Kaohsiung University of Applied Science, Kaohsiung, Taiwan 807, ROC)

Abstract

Inventory models with deteriorating items have received considerable attention in recent years. In considering the deteriorating inventory with permissible delay in payments, most researchers pay attention to a single warehouse. Under conditions of permissible delay in payments, this paper develops a model to determine the optimal cycle time for a single deteriorating item that is stored in two different warehouses. A rented warehouse (RW) is used to store the excess units over the fixed capacityWof the owned warehouse (OW). The rented warehouse is assumed to charge higher unit holding cost than the OW. In this paper, we propose a two-warehouse inventory model for deteriorating items under permissible delay in payments. It is assumed that the deterioration rate in RW is the same as in OW, and the holding cost in RW is greater than that in OW. The stocks of RW are transported to OW in continuous release pattern and the transportation cost is ignored. Three theorems are developed to determine the optimal cycle time and numerical examples are given to illustrate these theorems.

Suggested Citation

  • Kun-Jen Chung & Tien-Shou Huang, 2006. "The Optimal Cycle Time For Deteriorating Items With Limited Storage Capacity Under Permissible Delay In Payments," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 23(03), pages 347-370.
    • Handle: RePEc:wsi:apjorx:v:23:y:2006:i:03:n:s0217595906000814
    DOI: 10.1142/S0217595906000814
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    Cited by:

    1. Yu-Chung Tsao, 2010. "Two-phase pricing and inventory management for deteriorating and fashion goods under trade credit," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 72(1), pages 107-127, August.
    2. Liao, Jui-Jung & Huang, Kuo-Nan & Chung, Kun-Jen, 2012. "Lot-sizing decisions for deteriorating items with two warehouses under an order-size-dependent trade credit," International Journal of Production Economics, Elsevier, vol. 137(1), pages 102-115.
    3. Beatrice Marchi & Lucio E. Zavanella & Simone Zanoni, 2023. "Supply chain finance for ameliorating and deteriorating products: a systematic literature review," Journal of Business Economics, Springer, vol. 93(3), pages 359-388, April.
    4. Pahl, Julia & Voß, Stefan, 2014. "Integrating deterioration and lifetime constraints in production and supply chain planning: A survey," European Journal of Operational Research, Elsevier, vol. 238(3), pages 654-674.

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