Two Warehouse Eoq Model For Imperfect Quality And Reworkable Items With Parabolic Time Dependent Demand & Non-Linear Holding Cost Under Trade Credit Financing Policy Subject To Partial Backlogging

Abstract

 A two warehouse (Own warehouse and Rented warehouse) EOQ model for imperfect quality items with parabolic time dependent demand has been developed. It is assumed that the supplier has perfect and imperfect quality items. When the supplier provides lots for sale to his retailer, the retailer separates the whole lot by inspection (Screening) process into perfect and imperfect quality items. The retailer will send the imperfect quality items to repairing shop to make it as a perfect quality item. The cost of holding rises over time as longer storage periods requires more advanced and expansive storage facilities. Furthermore, managing larger inventory volumes often entails securing extra warehouse space (RW), potentially through rental agreements, resulting in increased holding expenses. Additionally, purchasing and storing greater quantities requires more substantial capital investments, typically financed at higher borrowing rates. Therefore, non-linear varying holding Cost in the Rented Warehouse has been considered. Shortage at Own warehouse is allowed subject to partial backlogging. With this assumption, the model has been framed with learning effect and trade credit financing policy. Different cases based on the trade credit period have been considered. The objective of this work is to minimize the total inventory cost and to find the optimal length of replenishment and the optimal order quantity. Computational algorithms are designed to find the optimal order quantity and the optimal cycle time. To elucidate our model, hypothetical numerical examples and sensitivity analysis are carried out to decide the feasibility of renting a warehouse with varying holding cost by availing a trade credit period for imperfect quality items.