Retailer’s lot-sizing policy under two warehouses and two levels of delay permitted using algebraic method

Abstract

The main purpose of this paper is to modify Huang’s model [13] by considering two warehouses. In addition, we try to use algebraic method to determine the optimal lot-sizing policy for the retailer under two warehouses and two levels of delay permitted. This paper provides this algebraic approach that could be used easily to introduce the basic inventory theories to younger students who lack the knowledge of calculus. Furthermore, we develop three easy-to-use theorems to efficiently determine the optimal cycle time and optimal lot sizing for the retailer. As a result, we deduce some previously published results of other researchers as special cases. Finally, a numerical example is given to illustrate these theorems obtained in this paper. In addition, we obtain a lot of managerial insights from this numerical example.

Keywords

• EOQ
• inventory
• two warehouses
• two levels of delay permitted
• algebraic method