Two-warehouse inventory model with K-release rule and learning effect

Abstract

In this study, a two-warehouse inventory model with K-release rule by employing learning effect on holding cost and ordering cost is developed. Here, we assumed that the holding cost in both warehouses and ordering cost is partly constant and partly decreasing in each cycle due to learning effect. When stock level exceeds the capacity of own warehouse, it is to be kept in additional rented warehouse with higher holding cost than OW. The inventory held in RW is transferred to OW in bulk size (K) where, K is less than the capacity of OW till the stock in RW gets exhausted and there is an associated transportation cost. The associated total cost minimisation is illustrated by numerical example and sensitivity analysis is carried out by using Mathematica–5.2 for the feasibility and applicability of our model.