A Two-warehouse Inventory Model with an Advanced Payment Mechanism for Stock-Dependent Demand, Deteriorating Items with a Fixed Shelf Life and Partial Backlogging

The most important factor in maximising profit margins in the expanding global market of today is inventory management. One of the most critical constraints in inventory management is the fixed shelf life of each item. Due to space constraints, a second warehouse may be required to store inventory for large-scale productions. The warehouse inventory is utilized to make installment payments for advance payments. Stock shortages are also possible with a partial backlog. This research looked at a two warehouse inventory model of deteriorating commodities with an advance payment mechanism and partial backlogging. We also consider that the demand rate is stock dependent, that one warehouse is owned, and that another is rented. The backlog rate is assumed to be time-dependent. Based on the assumptions, the cost function of this problem is a highly nonlinear constraint optimization problem. Mathematica is used to tackle this nonlinear optimization problem. A numerical example of this model has been simulated for various parameters, and the results have been physically interpreted.