The objective of this study is to develop of an inventory policy for deteriorating items, in which demand for the products is stock dependent and the retailer invests in preservation technology to reduce the rate of product deterioration. In many real-life situations, for certain types of consumer goods, the consumption rate is sometimes influenced by the stock-level. It is usually observed that a large pile of goods on a shelf in a supermarket will lead the customer to buy more and then generate higher demand. The consumption rate may go up or down with the onhand stock level. This paper is developed with the realistic conditions of demand, allowable credit period, partial backlogging and variable ordering cost. A solution procedure is given to find the optimal preservation technology cost and total cost of the system. A numerical example and sensitivity analysis are presented to illustrate the model.

In recent years, various researchers have discussed a two warehouse inventory system. This kind of system was first discussed by Hartely (1976) [10]. Hartely presented a basic twowarehouse model, in which the cost of transporting a unit from rented warehouse (RW) to own warehouse (OW) was not considered. Sarma (1983)[20] developed a deterministic inventory model with infinite replenishment rate and two levels of storage. In that model, he extended Hartely's model by introducing the transportation cost. Murdeshwar and Sathe (1985) [16] extended this model to the case of finite replenishment rate. Dave (1988) [5] further discussed the cases of bulk release pattern for both finite and infinite replenishment rates. He rectified the errors in Murdeshwar and Sathe (1985) [16] and gave a complete solution for the model given by Sarma (1983) [20]. In the above literature, deterioration phenomenon was not taken into account. In this paper, an inventory model is developed for deteriorating items with two-warehouse, permitting shortage under inflation and time-value of money. Holding costs and deterioration costs are different in OW and RW due to different preservation environments. The inventory costs (including holding cost and deterioration cost) in RW are assumed to be higher than those in OW. To reduce the inventory costs, it will be economical for firms to store goods in OW before RW, but clear the stocks in RW before OW. The stock is transferred from the RW to the OW following a bulk release rule.

In this paper we have developed a two echelon supply chain production inventory model for deteriorating products having stock dependent demand under inflationary environment. This model is developed for finite time horizon. The shortages are allowed and partially backlogged. To make this study close to reality the production rate is assumed to be a function of demand rate. A numerical example and sensitivity analysis with respect to different associated parameter is also presented to illustrate the study.

This study deals with an economic order quantity model to find out the optimal selling price and optimal ordering quantity for the products which deteriorates over time. The demand for the products depends on available stock level and selling price of the products. The shortages are allowed, and it is assumed that the occurring shortages are partially backlogged. Depending on the rate of backlogging two models are presented in this study. The first model assumes a constant rate of backlogging, while in second model the backlogging rate is assumed to be dependent on waiting time. Numerical example and sensitivity analysis are presented to illustrate the results of the proposed model.

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