A production model for deteriorating inventory items with two warehouses and backorders

In this paper we study a production system for deteriorating inventory items with two warehouses and backorders. An analytical model with two decision variables, namely the order level and the backorder level, is developed and the optimal solutions can be easily obtained by applying a simple numerical search. Several previous research results are derived as special cases by reducing our model in different ways. Numerical results show some interesting insights of the model and suggest that considerable cost savings can be realized by treating the production cycle time as part of decision instead of a fixed constant.