A Two-warehouse Svstem With Deterioration Items And A Stock Dependent Demand Rate

It is the classic EOQ formula generated by Harris in1915, which marks theenlightedment research of inventory control theory. Then by the1950s inventory controltheory has become a authentic theory. Until now it is not a long time for its growing, butwith the development of science and technology, this theory has been developed and grownin the part of both theoretical and practical, which aslo has brought considerable businessinterests for socity and the enterprise. Therefore more and more research have been paidattention to and worked on it. But because of complex enviornment in the bussinessoperation,we need develop new inventory control strategy to work out the new problems.So the research of inventory control theory still be the direction we should make effort to.This article studies a supply chain system of two warehouses with a stock dependentdamand rate, the main contents are as follows：First, we studies a supply chain system of two warehouses with a stock dependentdamand rate,where deterioation items is also considered. two cases are considered in thismodel: the one is the system of the single house with a stock dependent damand rate and aconstant deterioation rate. Within it we have obtained the average total profit founction andhave found the optimal order quantity strategy to make gross profit. The other one is thesystem of the two house with a stock dependent damand rate and a constant deterioationrate. Through the inventory model, we have obtained the average total profit founction andhave found the best order quantity strategy to make gross profit. Above all, we haveobtianed the basis of choosing to rent house or not is given. A numberical example is usedto illustrate procedure.Second, a new model has been established based on the former one, in whichincremental quantity discount is considered. And then the optimal order strategies, whichmake the average total profit maximum, are presented respectively under the conditions thatthe retailer uses his rented house or just uses his owned house. The basis of choosing to renthouse or not is given.Finally, we have summarized the whole paper and given the propable issuesbeing solved in the future for making prospects.