Two warehouse inventory model with stock-level dependent demand rate and time varying holding cost under shortages

The purpose of this article is to evaluate the value of integrating tactical warehouse and inventory decisions. Therefore, a global warehouse and inventory model is presented and solved. We have considered two separate warehouses, one is an own warehouse (OW) of finite dimension and other a rented warehouse (RW), for an infinite planning horizon. Model focuses on stock-level dependent demand rate and a time dependent holding cost. We considered holding cost is an increasing function of time. In addition, we allow for shortages and complete backlogging. A numerical example and sensitivity analysis on some parameters are implemented to illustrate the model.