A two-warehouse inventory model for items under conditions of permissible delay in payments

In this paper, a two-warehouse inventory problem under conditions of permissible delay in payments is considered. As a matter of fact, the inventory system discussed by this paper is a special case of Huang´s(2006) model. Although his study simplifies the solution procedure, the existence of some optimal solutions must satisfy non-negative condition. That is, the discussion on the optimal solutions is not comprehensive. This article deals with an alternative approach to present a simple procedure in order to determine the optimal replenishment cycle when the supplier provides the retailer a permissible delay in payments. Some theorems are proposed to find the optimal cycle time and numerical examples are given to illustrate the proposed theorems.