A note on “Two-warehouse inventory model with deterioration under FIFO dispatch policy”

Abstract

A recently published paper by Lee [C.C. Lee, Two-warehouse inventory model with deterioration under FIFO dispatching policy, European Journal of Operational Research 174 (2006) 861–873] considers different dispatching models for the two-warehouse inventory system with deteriorating items, in which Pakkala and Achary’s LIFO (last-in–first-out) model [T.P.M. Pakkala, K.K. Achary, A deterministic inventory model for deteriorating items with two warehouses and finite replenishment rate, European Journal of Operational Research 57 (1992) 71–76] is first modified, and then the author concludes that the modified LIFO model always has a lower cost than Pakkala and Achary’s LIFO model under a particular condition specified by him. The present note points out that this conclusion is incorrect and misleading. Alternatively, we provide a new sufficient condition such that the modified LIFO model always has a lower cost than Pakkala and Achary’s model. Besides, we also compare Pakkala and Achary’s original LIFO model with Lee’s FIFO (first-in–first-out) model for the special case where the two warehouses have the same deteriorating rates. Finally, numerical examples are provided to investigate and examine the impact of corresponding parameters on policy choice. The results in this note give a much clearer picture than those at Lee’s paper about the relationships between the different dispatching policies for the two-warehouse inventory system with deterioration items.