Two-product storage-capacitated inventory systems: A technical note

This paper considers a two-product inventory model with limited storage capacity and constant demand rates. We aim at finding an ordering policy that minimizes the cost per time unit. In the literature, several solution methods have been developed for this problem, but these are limited to very restrictive classes of policies. We consider a much more general class where the order quantity of one of the products is allowed to vary. These policies are still cyclic and easy to implement. Closed-form expressions are derived for determining the optimal order quantities. It is shown that savings of up to 25% are possible compared to existing approaches. (C) 2016 Elsevier B.V. All rights reserved.