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Advances in Decision Sciences
Volume 2013, Article ID 595074, 5 pages
http://dx.doi.org/10.1155/2013/595074
Research Article

A Two-Product Inventory Model with a Joint Ordering Policy

Department of Statistics and Operations Research, National University of Science and Technology, P.O. Box AC 939 Ascot, Bulawayo, Zimbabwe

Received 15 April 2013; Accepted 12 October 2013

Academic Editor: Khosrow Moshirvaziri

Copyright © 2013 A. Masache. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Inventory is one of the most visible and tangible aspects of doing business. This is the reason why most problems of a business often end up in inventory. Most inventory studies focus on a single type of product or item such that optimality decisions are arrived at for that single product. In this study, we create a scenario where two types of products are considered in such a way that there exists a joint ordering policy. A continuous review inventory model was developed but ended up with a single period review model for simplicity reasons. We tried to exhaust all main cost elements and fed them into the model in addition to investigating the possible limitations that may constrain the whole decision making process. Six constraints were found and a mathematical programming model was developed. We further went on to prove that the mathematical inventory-programming model developed minimises the total inventory cost in such a scenario.