Optimizing Two-Warehouse Inventory for Shelf-Life Stock with Time-Varying Bi-Quadratic Demand Under Shortages and Inflation

Abstract

An organisation needs to control its inventory efficiently and goods shelf life is a key factor. Goods can deteriorate due to various factors such as damage, rotting, and dryness, reducing their utility over time. The shelf life of goods refers to the maximum period for which they can be stored while maintaining their acceptable quality. This research paper focuses on selecting the best replenishment strategy for shelf-life stock with biquadratic time-dependent demand, accounting for inflation and shortages, where shortages are partially backlogged. The objective is to minimize the overall cost, which includes several inventory costs, using MATLAB to optimize the quantity and time. The investigation indicates that the average total cost is $483, the optimal order quantity is 461 units, and the replenishment quantity is 538 units, which occurs at a replenishment interval of 3.7 years. The model's elucidation is enhanced by a numerical example and a sensitivity analysis.