Ordering policy for two-phase deteriorating inventory system with changing deterioration rate

The models of inventory replenishment policies for the deterioration items have been widely studied, and in most of the deterministic models, the in-transit deteriorating loss is not considered. But in operation management practice, transportation time is the major portion of the lead time, and the extent of spoilage of the fresh items is also influenced by the length of shipping time. The impact of in-transit deterioration loss to the optimal replenishment policy for deteriorating goods was studied. Firstly a in-transit and on-hand two-phase inventory model with different deterioration rate was established, then it was proved that there exists unique optimal order cycle to minimize the relevant annual cost, and the optimal order cycle is do affected by the length of transportation time and the deterioration rate in-transit. Finally, numerical examples were conducted to illustrate the effectiveness of the proposed model.