This study examines a warehouse model for deteriorating items with both owned and rented warehouses. It looks at how demand changes over time, stock levels, and allows for payment delays, enabling partial inventory fulfilment when there are shortages in the owned warehouse (OW). The model connects order delays to restocking times and analyses different scenarios based on payment delay options. The goal is to minimise inventory costs by determining the best restocking cycles, order sizes, and depletion points at the OW. The study includes algorithms to calculate these optimal values, helping decide whether renting a warehouse and using payment delays are worthwhile. With numerical illustration, it shows how this approach can optimise supply chain management by offering valuable managerial insights.
Naik et al. (Thu,) studied this question.