mathematics
Article
A Study on Two-Warehouse Inventory Systems with Integrated
Multi-Purpose Production Unit and Partitioned Rental Warehouse
Viswanath Jagadeesan 1, * , Thilagavathi Rajamanickam 1 , Vladimira Schindlerova 2 , Sreelakshmi Subbarayan 3
and Robert Cep 4, *
Citation: Jagadeesan, V.;
Rajamanickam, T.; Schindlerova, V.;
Subbarayan, S.; Cep, R. A Study on
Two-Warehouse Inventory Systems
with Integrated Multi-Purpose
Production Unit and Partitioned
Rental Warehouse. Mathematics 2023,
11, 3986. https://doi.org/10.3390/
math11183986
Academic Editor: Hari Mohan
Srivastava
Received: 7 August 2023
Revised: 14 September 2023
Accepted: 15 September 2023
Published: 19 September 2023
Copyright: © 2023 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
Mathematics 2023, 11, 3986. https://doi.org/10.3390/math11183986
1 Department of Mathematics, Vel Tech Rangarajan Dr Sagunthala R & D Institute of Science and Technology,
Chennai 600062, India
2 Department of Mechanical Technology, Faculty of Mechanical Engineering, VSB-Technical University of
Ostrava, 708 00 Ostrava, Czech Republic
3 Department of Engineering Mathematics, HKBK College of Engineering, Bengaluru 560045, India
4 Department of Machining, Assembly and Engineering Metrology, Faculty of Mechanical Engineering,
VSB-Technical University of Ostrava, 708 00 Ostrava, Czech Republic
* Correspondence: jviswanath@veltech.edu.in (V.J.); robert.cep@vsb.cz (R.C.)
Abstract: A study of two warehouse inventory systems with a production unit is developed in this
article with some constraints which are of practical applicability to optimize the total production
cycle and its cost. A production unit evolves in three different states to retain its quality and prolong
its lifetime: the state of producing items, the state of reworking the identified defective items, and
the state of being idle. It processes the items up to a certain time point. The screening process starts
immediately after a product comes out of the production unit. The classified non-defective items are
first stored in own warehouse (OW), after filling to its maximum capacity, and the remaining items
fill in the first block ( RW 1 ) of the rental warehouse ( RW ). All identified defective items are stored in
the second block ( RW 2 ) of RW. The holding cost of an item is higher in RW than OW. All defective
items are sent to the production unit for re-do processes as a single lot immediately after the stop of
the production and re-do items are stored in RW 1 to satisfy the demand. The items in the RW 1 are
of higher priority in satisfying the demands after the stop of the production unit in producing new
items as to deduce the total cost. Demand is assumed as both time and advertisement dependent and
is encouraged once production starts. The deterioration rate differs in both warehouses. No backlog
is entertained. The study is directed to achieve optimum total cycle cost towards the attainment of
the optimum production time slot and the entire cycle of the system. We have arrived at explicit
expressions for the total cost function of the entire production cycle. An analytic optimization process
of the discriminant method is employed in the form of an algorithm to arrive at the optimum total
cost. It provides a numerical illustration of a specific environment. The implications of the current
research work are as follows. The optimum utility of production units in three different states in
arriving at the optimum total cost is extensively studied with respect to deterioration, demand, and
production rates. It also examined the influence of fluctuating deterioration, demand, and production
parameters in arriving at optimum deterioration cost, holding cost, and total cycle cost, as they have
important managerial insights. The effect of rental charges on the optimum total cost is examined as
the system is used for multi-purpose storage.
Keywords: two-warehouse inventory; deterioration; multi utility production unit; partitioned rental
warehouse; screening processes
MSC: 90B05
1. Introduction
Molding machinery is used in various industries as a production unit for the process
of molding raw plastic or material into specific shapes or desired forms. It depends on
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Mathematics 2023, 11, 3986 2 of 24

the material being molded, the complexity of the desired shape, the production volume,
and some other factors. A variety of molding machines are available, some of which
are as follows: injection molding machines in which the molten plastic is injected into a
mold cavity and it is used for producing a wide range of products, which include small
components and large automotive parts; extrusion molding machines in which the raw
material, usually plastic pellets or rubber, is pushed through a heated extrusion die to create
a plastic pipe- or tube-like shape; compression modeling machines in which the preheated
material is placed into a mold cavity and then the presser is applied to compress and shape
the material to obtain items such as brake pads and electrical materials; blow molding
machines, which help to create hollow plastic or glass objects by inflating a hot hollow tube
in a mold cavity; rotational molding machines in which the mold is filled with material
and then rotated slowly while being heated so that the material melts and coats the interior
of the molt to form the desired shape, such as tanks, containers and some playground
equipment. Some more molding machines that are under use are thermoforming machines,
die-casting machines, vacuum molding machines, transfer molding machines, and injection
blow molding machines. These are some of the primary types of molding machinery
designed to meet the specific needs of specific product types. The choice of machinery
depends on factors such as the desired output, material properties, production time and
volume, and other cost considerations.
In general, if the production process prolongs indefinitely, it results in either an
increasing percentage of defective items, which means the machine enters out of control, or
machine failure occurs due to the generation of thermal effect. It is necessary to follow a
certain working schedule, which includes the working state and idle state of the machine.
In the case of molding machines, some of the raw materials are reusable after it is identified
that the output is defective; in such cases, the re-do processes also continue after the primary
production processes are over. In such cases, idle time starts only after the re-do process
is over. It motivates us to attempt to analyze the effect of various lengths of production
units on optimizing the total cost of the production inventory system in two warehouse
storage environments.
Managing two-warehouse inventory systems with an integrated production unit is
more complex if we deal with production time-restricted automobile types of machineries
used for the production process. Since some types of machines, for example, dye and
molding machines, need to be idle or partially working for a certain period of time after
producing the item so as to prolong its lifetime and maintain their working efficiency. In
general, for each production cycle, the production unit is not allowed to work for the entire
cycle. It is stopped after it reaches its assigned task of items produced and kept in idle
state, until the start of the next cycle. If not, then it results in an increasing rate of defective
items in its production processes and it causes loss to any of the industry irrespective of
its scale. Therefore, the processes of cost optimization of any industry which deals with
sensitive production units need to be transcendent on the scheduling of production and idle
period of the machine in a production cycle. For the purpose of the optimum utility of the
production unit, part of its idle time is devoted to re-do the items if any items are identified
among its production units in the course of production. In such cases, it is essential to
identify the time points such as the stop of the production unit, stop of re-do processes,
and idle time durations in each production cycle. Moreover, to entice more customers, the
manufacturers, suppliers, and merchants offer a variety of promotions or print product
advertisements. As a result, they make use of mainstream media including social media,
television, newspapers, movies, and posters. It would be important to investigate functions
that more accurately capture the demand rate because it frequently relies on time, just like
in actual inventory systems.
This research output will contribute more to the investors who are involved and invest
in the two-warehouse inventory management systems of an integrated production unit to
optimize the total cost of the system. This article exhibits the following: how the various
rates of deterioration in both warehouses influence the optimum production unit slots and
Mathematics 2023, 11, 3986 3 of 24

optimum total cost, how the parameters in the demand function dominate the optimum
production unit slots and optimum total cost, how the production rate and rental cost
govern the optimum production unit slots, and optimum total cost.

2. Literature Review and Model Initiation

Table 1 shows the literature review details for production inventory models.

Table 1. Comparison of our article with the existing relevant literature.

Number of Demand Imperfect Re-Do

Authors Deterioration Screening Optimization
Warehouses Nature Quality Processes
Das, S. et al.,
One Selling price Constant NO NO NO Cost
2021 [1]
Selling price
Continuous
Palanivel, and cost for
One probability NO NO NO Cost
2014 [2,3] advertise-
distribution
ment
Gautam, P.,
One Constant No Yes Yes Yes Cost
2018 [4]
Khara, B.,
One Constant No Yes Yes No Cost
2021 [5]
Manna, A.K.,
Two Constant Constant Yes Yes Yes Cost
2021 [6]
Sivashankari,
One Constant No Yes Yes Yes Cost
C.K., 2014 [7]
Lin, C.S.,
One Constant No Yes Yes Yes Cost
2003 [8]
Shah, N.H., Time and ad-
One Constant Yes Yes Profit
2018 [9] vertisement
Lin, C.S.,
One Constant Exponential Yes Yes Cost
1999 [10]
Paul, S.K.,
One Constant No Yes Rejected No Profit
2015 [11]
Advertisement
Patra, K., Sold with
One and selling No Yes No Profit
2018 [12] discount price
price
Sana, S.S.,
One Constant No No No No Cost
2010 [13]
Advertisement, Some % of items
Narang, P., Non- % are sent for
One price, and Yes are sale at Profit
2023 [14] instantaneous rework
time discount price
Mandal, P., Stock
Two No Yes Yes Yes Cost
2019 [15] dependent
Sanjai, M.,
One Constant No Yes Yes Yes Profit
2019 [16]
Jauhari, W.A.,
One Stochastic No Yes Yes Yes Cost
2019 [17]
Advertisement Production
Manna, A.K., Sale at reduced
One and time rate Yes No Profit
2017 [18] cost
dependent dependent
Khara, B.,
One Advertisement No No No No Profit
2021 [19]
Mathematics 2023, 11, 3986 4 of 24

Table 1. Cont.

Number of Demand Imperfect Re-Do

Authors Deterioration Screening Optimization
Warehouses Nature Quality Processes
Selling price
Gautam, P.,
One and adver- No Yes Yes Yes Cost
2022 [20]
tisements.
Lin, T.Y.,
Two Constant No Yes Yes Yes Cost
2015 [21]
Singh, S.R.,
Two Constant Constant Yes Yes Yes Cost
2013 [22]
Majumder, P.,
Two Stock Constant No No No Cost
2016 [23]
Time and ad-
Present paper Multiple Constant Yes Yes Yes Cost
vertisement

Article [14] speaks on the single imperfect production system with a re-do of some
fraction of defective items and the demand rate is influenced by time, advertisement, and
price. The remaining defective items are sold for minimum cost. The non-linear profit
function is optimized by genetic algorithm coding. A defective production inventory model
is discussed in [20] by a profitable rework strategy on defective items and optimizes the
batch size of the production and selling price of the end product. In addition, both energy
consumption during the production process and carbon emission cost is considered in
optimizing the system cost. The demand rate is influenced by selling prices and advertise-
ments. An integrated inventory system for imperfect production is presented in article [24]
by taking demand rate, levels of inventory, selling prices, and advertising frequency into
account. It is searched for the lower total cost to both suppliers and vendors.
Mathematical analysis of the production inventory model with the consideration of
production system reliability was carried out by [1]. The trade credit policy is implemented
and Taylor’s approximation technique is used to optimize the arrived non-linear problem.
In order to increase consumer demand and lower deterioration costs, [25] suggests a price
discount approach using a Stackelberg-type game concept to address a two-echelon sup-
ply system with unpredictable demand. The combined purchasing production inventory
system has been the subject of 102 published papers between 1992 and 2021. Article [26]
reviews the papers which focus on the complex data type, temporal dynamics, and opti-
mization approach.
Article [5] emphasizes the retailers’ partial advance payment with a free transport
facility on a two-echelon integrated production inventory. The retailers’ profit is maximized
by the branch and bound technique to obtain an integer solution of the model to find
the optimum number of production and replenishment cycles along with the reliability
of the system. The retailer and manufacturer interacting with an imperfect production
inventory model was developed in [19], with the consideration of reliability factors on
the breakable products’ production unit. The effect of the increase in average profit by
advertisement is proven by appropriate numerical examples. Article [27] analyzes how
quality and sustainability affect sales of perishable goods, and it finds that strict pricing
reduces profitability demand fluctuations depending on consumer habits, and quality
deteriorates over time.
The imperfect production inventory model is formulated in [16] to attain the optimal
minimum total cost by optimizing the production lot size of the system. Two models are
discussed with different policies. The first one is with a rework on defective items in the
same cycle and no shortages are allowed. The second model is with a rework on defective
items but shortages are allowed. The model was validated by numerical examples with the
help of Microsoft Visual basic code. In order to maximize profit, project [28] has designed a
Mathematics 2023, 11, 3986 5 of 24

combined system of inventory prices and control for consumable goods with shortages. It
will concentrate on the bestselling prices, repayment terms, and order sizes.
Implementing carbon emissions into inventory modeling helps companies to make
informed decisions that balance economic efficiency with environmental sustainability.
It helps in identifying emission reduction opportunities, optimizing supply chain opera-
tions, and aligning with broader sustainability objectives. The vendor and buyer supply
chain management of the production inventory model was developed by [4], with the
consideration of one of the greenhouse gas emission carbon emission costs. The individual
and joint decisions of the investors are considered in optimizing the cost of the system.
Studies [29,30] propose a mixed-integer linear programming model for optimizing the
blood supply chain, addressing challenges such as carbon emissions and obsolete products
in a real-world case study.
The integrated production inventory model with two states of production units is con-
sidered by [6] to maximize the average profit of the system. The production of the number
of imperfect items by the production unit while it is out of control is production system
random and it depends on rate of the production and the length of out-of-control state of
the production unit. Due importance is given to minimizing environmental pollution and
the development cost to improve the system reliability is considered. In [9,31], the authors
analyzed the EPQ inventory model with reliability as a decision variable in order to maxi-
mize the total profit. Some of the hurdles which disturb the production system to produce
defective items are considered and the demand is assumed to be influenced by time and
advertisement. A single product imperfect production inventory with advertisement and
selling price-dependent demand as well as demand depreciation rate and item imperfect
production rate-dependent risk function is discussed in [12,32]. The profit is maximized
and the risk is minimized as well.
Article [18] speaks of the classical EPQ model of a production inventory system with
imperfect production units. A dynamic advertisement-rate-dependent demand rate is
considered and the production rate is influenced by the defective rate. The produced
items are screened to identify the defective items at a constrained rate. Some important
parameters in [33] that impact the optimal total profit are analyzed in the sensitive analysis
section. A single-stage production inventory with a rescheduling of production policy after
one or two disruptions is modeled by [11]. The model is solved for optimizing the profit by
pattern search and by genetic algorithm and has developed a dynamic solution approach
for multiple disruption cases. The study [34,35] concludes the SVSB model for food goods,
which takes into account the exponential quality degradation and uses the grey wolf
optimizer algorithm to maximize joint total profit, exceeding Indonesia’s genetic algorithm.
The classical EPQ model of deterministic production inventory with three probabilistically
varying deterioration cost functions was studied by [2] with demand influenced by both
product cost and its advertisement. Model [36] includes more parameters which include
raw and labor forms in the formulation of production cost. The objective of minimizing the
manufacturers’ total inventory cost was achieved with a valid numerical example. In [3],
an EPQ model was developed and studied the effect of time–value money and money
inflation on minimizing the total cost of the inventory induced from optimum cycle length
and production quantity. The authors of [37,38] have included: production cost-dependent
selling price, variable replenishment, deterioration function as continuous and probabilistic
in nature, and increasing linear holding cost function in their model. In article [7], the
single-stage production inventory model is developed to obtain optimum quantity where
all imperfect items are reworked in the same cycle and achieve optimum total cost. The
model is numerically verified and validated by Microsoft Visual Basic code.
The integrated production inventory model is developed by [17] to minimize the
expected total cost of the system with the assumption of linearly varying lead time which
depends on the size of the production lot and the demand is stochastic in nature. The
model in [39] has simultaneously taken the optimality of all safety factors, ordering quan-
tity, production batch, delivery of the frequency, and quality of the production processes
Mathematics 2023, 11, 3986 6 of 24

into account. The suggested algorithm is verified by a numerical example and emphasizes
that the added quality improvement affects the expected total cost in production inven-
tory decision making. The economic manufacturing model in [40] is used in inventory
management to determine the optimal production quantity that minimizes the total cost
of manufacturing and holding inventory. This model considers several factors, including
the setup cost, holding cost, demand rate, production rate, and setup time. By balancing
the setup costs and holding costs, the model helps to determine the most cost-effective
manufacturing quantity.
An economic manufacturing model with imperfect production units is developed
by [13]. The optimal system total cost is arrived at by optimizing safety stock, produc-
tion rate, and lot size of the production with two types of production policies. A single
warehouse-defective production inventory system is analyzed in [8] with batch production
and a rework on defective items. The production system is periodically inspected and
restored, which minimizes the expected total cost of the system. The model is further
extended by the following restrictions: rate of defective as a function of the system setup
cost, proportion of non-constant defective items, and limited raw material capacity. In
some special cases, the production system may too be subject to deteriorate and produce an
incomplete end product as a result. Article [10] speaks on such a production inventory sys-
tem with constrained raw materials for production and the assumption of batch production.
The total cost function is optimized and the model is examined for the cases by considering
that the defective items are not constant and the setup cost-dependent defective rate.
A literature review on the two-warehouse inventory model reveals that another im-
portant factor in the domain of production inventory with integrated production units is
the storage of produced items. End products received from the production unit are stored
in a single- or multi-storage inventory. In some cases, from the retailer’s point of view,
they may go for additional rental warehouses which are nearby their OW for the storage of
excess items after filling their own warehouse to meet the demands. The queue disciplines
such as last-in-first-out and first-in-last-out are not made out to play a vital role in studying
the queuing model in arriving at effective performance measures but also have a crucial
role in the inventory model in order to consider the two warehouses’ inventory which
includes one as a rental warehouse with high holding cost. It is the better option to follow
a last-in-first-out policy in order to release the items in the rental warehouse first to satisfy
the demands even if the items in the rental house are stored last after filling their own
house. In article [41], a two-warehouse inventory system (as it includes an additional rental
warehouse to store the excess items) with time-dependent demand and rework on defective
items is discussed. It reveals that production cycle time minimizes the total relevant cost by
the generalized reduced gradient method and establishes that the last-in-first-out system is
less expensive while the holding cost in RW is higher.
A study is undergone by [42] with the objective of maximizing the profit by arriving
at optimal ordering quantity and size of backlog items on a two-warehouse inventory
management system of imperfect quality items. To know the influence of money inflation
and different payment options in the study of two-warehouse single product inventory
in optimizing the total cost, one can refer to articles [43,44]. Managing inventory across
multiple warehouses is a common practice for many businesses to improve distribution,
reduce shipping costs, and enhance customer service. There are several strategies and
models that can be employed to optimize inventory management in a two-warehouse
scenario. A two-warehouse integrated production unit inventory model was studied
by [15] under the following environment: the production system may produce imperfect
products, and also, demand for products depends on the on-hand stock, vendor discount
offers on items to the buyer, and the buyer can go to the rental warehouse with infinite
capacity once his own warehouse is filled. The average total cost is minimized for the
integrated system. All key parameters of their effects are verified extensively.
A study with the objective of minimizing both supplier and retailer total cost of the
two-warehouse EPQ inventory model with two levels of trade credit period was carried
Mathematics 2023, 11, 3986 7 of 24

out by [23]. Two different scenarios are considered based on the offering and acceptance of
credit periods and time of exhaustiveness of items in two warehouses. Payment after the
credit period is also discussed as an alternate approach. The generalized gradient method
of the non-linear optimization technique is employed. A two-warehouse inventory system
with imperfect production units is analyzed in [21]. It includes suppliers, quantity discounts,
and maintenance policies to keep the production unit under control. An algorithm to
obtain the optimum ordering policy is developed and the system behavior is studied with
numerical illustrations. In addition, [22] studies a two-warehouse inventory model with
defective production items. Money inflation and item decay are considered in order to
obtain optimal cost functions and replenishment cycles.
A literature review on inventory models with a screening process reveals that the
major fact which decides the steady and exponential growth of any business is the quality
maintenance and upgrading of purchasing products or produced products. Therefore, it is
essential for any inventory management system to screen the items either once they come
out of the production unit or after purchase for sale. We may refer to [45–47] for the study
of inventory models with decaying items in order to minimize the total cost under the
following environment: effect of preservation technology, advertisement demand, selling
price and time demand, the partial backlog of shortages, and trade credit. The model in [48]
suggests that the SVSB model for food goods, which takes into account the exponential
quality degradation and uses the grey wolf optimizer algorithm to maximize joint total
profit, exceeding Indonesia’s genetic algorithm.
The optimality profit for the perishable product inventory system is examined by [49]
as two separate models with the exclusion of shortages and inclusion of partial backlogs
under the assumption of time and an advertisement frequency-influenced linear holding
cost. A solution algorithm for maximizing the profit is suggested. A long-term manufactur-
ing inventory structure was established for maximizing the expected overall revenue using
Harris–Hawks Optimization, surpassing GA and PSO in [50] which studies the effect of
quality degradation. The authors of [51] study and optimize the total revenue by extending
the classical and traditional EPQ/EOQ model with the consideration of imperfect quality
items in a single warehouse environment and the assumption of selling all the identified
defective items at the end of screening processes as a single lot. This model is extended
by [52] in two warehouse environments and maximizes the annual total profit of the model.
Paper [53] builds an internet-of-things-related fuzzy theory model, revealing the
importance of the influence of the green delivery factor on firm performance. The inventory
management in a primary warehouse with a small capacity and a subsidiary warehouse
with a high capacity is considered in article [54]. To choose the best thresholds, it employs
a sensitivity analysis and a triple-parameter band policy. The study by [55] proposes a
production inventory theory for perishable goods, which are stored in two warehouses
with the consideration of exponential and sale price-dependent demand. The triangular
fuzzy number is used to minimize the overall cost.
In our focused review of the past literature on production models, two-warehouse
inventory models and inventory models with screening facility and re-do, no study has
reviewed the two-warehouse inventory system with a integrated multi-purpose production
unit with immediate screening of items after it gets produced. It has thus urged us to take
up the study on deterministic two-warehouse inventory systems where the production
unit evolves in three different states, namely, in the production process, in re-do processes,
and being idle. All produced items are screened and the identified good items are for
sale and items in excesses are stored in both OW and RW for future sale. The partitioned
RW is temporarily used to store the identified defective items for a short time until they
are sent as a single lot to the production unit for re-do after it stops production. The
novel implementation of a three-state production facility, screening facility, and partitioned
utility of rental warehouses in traditional two-warehouse inventory helps many investors
who own two-warehouse inventories in the above said environment to optimize their
Mathematics 2023, 11, 3986 8 of 24

total production cycle cost by finding optimal time points of production stop time and
production cycle length.
The arrangement of the article is as follows: the model notations, assumptions, and
descriptions are discussed in Section 3, a representation of the models by governing
equations is made in Section 4, the cost analysis, total cost function, and optimization of
total cost are discussed in Section 5, the model validation by numerical illustration and
sensitive analysis are in Section 6, and the last section is devoted to a conclusion and future
research directions as Section 7.

3. Notations, Assumptions, and Model Descriptions

The notations and assumptions are provided here for modeling purposes.

3.1. Assumptions of the Model

• The production rate of the system is higher than the demand rate.
• The demand rate is higher compared to the rate of rework processes.
• The RW is used not only to store the excess items but also the defective items which
are identified by the screening process.
• The RW has two blocks; say RW 1 to store the excess items after filled the OW of its full
capacity. Say RW 2 to store the screened and identified defective items which have to
be sent to the re-do facility.
• Both production and screening processes are simultaneously taking place.
• After production is completed, the same machine is used for rework processes.
• After completing the screening processes, all the identified defective items are sent to
the production unit as a batch for rework.
• Only the non-defective items may be subject to deterioration.
• No deterioration takes place for the identified defective items in RW 2 which are sent
for the re-do process as a single slot.
• All defective items are considered to be made as perfect ones after undergoing the
re-do process.
• All defective items sent for re-do processes are received back within the interval [t2 ,t3 ].

3.2. Model Description

A two-warehouse inventory system which has different characteristics depends on
various factors such as the type of goods stored, the business model, location, and logistics
requirements. A multi-purpose production unit in inventory modeling is a facility that helps
to either produce a variety of products or re-do defective products that are identified in its
production slot. These production systems have specific characteristics that distinguish
them from single-purpose production units.
We considered a multi-purpose production unit in a two-warehouse environment.
There are two warehouses. One of them is OW which is of limited storage capacity for
storing items which are produced by a multi-purpose production machine. Once the
production unit starts producing new items, all the end products are stored in OW first up
to its maximum capacity of W. Once the OW reaches its maximum level, the remaining
items are stored in a RW with higher holding cost. The production stops at a specific time
point t2 . The production unit starts producing items at the rate of 0 P0 .
We assume that the time between the start of the production unit and the arrival of
the first end product to the OW is ignorable. All demands are entertained once the items
are stored in OW. The screening process stars simultaneously. A part of the RW is used
to store the identified defective items for a short span of time until they are sent for re-do
processes as a single lot after production is stopped. The utility of the production unit
is of multi-purpose and is used to re-do the defective items after production is stopped.
Initially, identified non-defective items are stored in the OW which is of limited capacity
for accommodating W items. The identified defective items by the production unit up to
the time point t2 are stored in a separate block RW 2 in RW. Immediately after a product is
Mathematics 2023, 11, 3986 9 of 24

identified as non-defective, the arriving demands begin to be satisfied. Time-dependent

demand occurs at the rate of a + bt , where a is a constant rate of demand and b is the rate
of advertisement which is influenced by time. Excesses of non-defective items are stored
in OW until reaching maximum capacity. The non-defective items in the warehouses OW
and RW are subject to deterioration with rates ϕ1 and ϕ2 , respectively. The OW attained
its maximum storage capacity at the time point t1 . The level of inventory at any point t
in the interval [0, t1 ] is dynamic in nature due to the arrival of the identification of non-
defective items by screening processes, demand, and deterioration. The production unit is
stopped at the time point t2 . Identified non-defective items after the time point t1 are stored
in block RW 1 of RW. The inventory level in the interval [t1 , t2 ] is governed by demand,
deterioration, elimination of defectives, and production.
After production stops, the production unit is engaged with carrying out re-do pro-
cesses on identified defective items. Items stored in RW 1 is of priority to sell first to avoid
Mathematics 2023, 11, x FOR PEER REVIEW 10 of 25
excesses charges. The defective items are made as good quality items by the re-do process
and are stored in RW 1 . Items in RW 1 are decreased and become empty at the time point
t3 due to deterioration and demand. From t1 to t3 , the items in OW are decreased due to
deterioration
to deteriorationonly. Items
only. from
Items fromOW 𝑂𝑊areare
satisfying thethe
satisfying demands
demands only after
only thethe
after time point
time t3 .
point
𝑡The
3 . items
The in
items the
in OW
the 𝑂𝑊are decreased
are in
decreased the
in interval
the [t
interval3 , t[𝑡] due
,
43 4 𝑡 ] to
duedeterioration
to and
deterioration demand
and de-
and reach
mand zero at
and reach theattime
zero the time t4 . The
pointpoint diagrammatic
𝑡4 . The diagrammatic representation
representationof of
thethe
model
model is
depicted in Figure
is depicted in Figure 1.1.

Figure 1.
Figure Diagrammatic representation
1. Diagrammatic representation of
of model.
model.

4. Governing Equations of the Model

4. Governing Equations of the Model
Let IO (t) represent the inventory level of OW at time t. The following differential
Let 𝐼𝑂 (𝑡) represent the inventory level of 𝑂𝑊 at time t. The following differential
equation represents the dynamic inventory level of the OW in the interval [0, t1 ]:
equation represents the dynamic inventory level of the 𝑂𝑊 in the interval [0, 𝑡1 ]:
d𝑑
b𝑏t 𝑡 )−−ϕ𝜑1 I𝐼O ((𝑡)


IO
𝐼 t) =
((𝑡) = αP
𝛼𝑃 −− (𝑎
a++ t) (1)
(1)
dt
𝑑𝑡 𝑂 1 𝑂

We solve (1) by using the

We condition IO𝐼𝑂(0(0)
the condition ) ==0,0,and
andwe
weobtain
obtainthe thelevel ofof
level inventory at
inventory
t ∈𝑡 [∈0,[0,
at t1 ] 𝑡as
1 ] as
 1 − 𝑒−−𝜑 1 𝑡 11
𝐼𝑂((𝑡) = ((𝛼𝑃 1 − e ϕ1 t ) + 𝑡
+ e𝑒−−𝜑
ϕ11t𝑡 ), 𝑡 ∈ [0, 𝑡1 ]
−a𝑎)
) ( 𝜑 + log 𝑏 + 𝜑 (−𝑏−bt + (2)


IO t) = αP − , t ∈ [0, t1 ] (2)
ϕ11 logb + ϕ11
The screened excesses produced of non-defective items after being filled in 𝑂𝑊 are
The screened excesses produced of non-defective items after being filled in OW are
stored
stored in block 𝑅𝑊
in block RW11 of 𝑅𝑊. The
of RW. The production
production unit
unit stops
stops producing
producing the
the new
new items
items at
at time
time
𝑡t =
= 𝑡t22.. Dynamic
Dynamic changes
changes in
in the
the level
level of
of inventory at 𝑅𝑊
inventoryat RW11 are
are influenced
influenced by
by both
both demand
demand
and deterioration. Therefore, the inventory level at time ′𝑡′ in the interval [𝑡1 , 𝑡2 ] is de-
rived as follows:
𝑑
𝐼 (𝑡) = 𝛼𝑃 − (𝑎 + 𝑏 𝑡 ) − 𝜑2 𝐼𝑅1 (𝑡) (3)
𝑑𝑡 𝑅1
Mathematics 2023, 11, 3986 10 of 24

and deterioration. Therefore, the inventory level at time 0 t0 in the interval [t1 , t2 ] is derived
as follows:
d
I (t) = αP − a + bt − ϕ2 IR1 (t)


(3)
dt R1
We arrive at IR1 (t) as
!
1 − e ϕ2 ( t1 − t ) 1  
IR1 (t) = (αP − a) + bt1 e ϕ2 (t1 −t) − bt (4)
ϕ2 logb + ϕ2

by using the condition IR1 (t1 ) = 0.

As mentioned earlier, all the screened defective items in the production period [0, t2 ]
are kept in the block RW 2 up to time t2 and sent to the production unit as a single batch
for re-do processes by the same production unit as a secondary usage. The following
differential equation governs the inventory dynamism of defective items in RW 2 :

d
IR2 (t) = (1 − α) P (5)
dt
We obtain
IR2 (t) = (1 − α) Pt, t ∈ [0, t2 ] (6)
by using the condition, IR2 (0) = 0.
All demands are satisfied by the items from the block RW 1 of RW immediately after
the stopping of the production unit to produce new items. Therefore, the items in OW are
decreased only due to the items’ deterioration in the interval [t1 , t3 ].
The level of inventory in OW is governed by the following differential equation:

d
I (t) = − ϕ1 IO (t), t ∈ [t1 , t3 ] (7)
dt O
Using the condition, IO (t1 ) = W, we obtain

IO (t) = We ϕ1 (t1 −t) , t ∈ [t1 , t3 ] (8)

The production system is used for secondary usage to conduct re-do processes once it
stops producing new items. All defective items identified by the screening process are sent
as a single lot to the production unit for the re-do process.
In the interval [t2 , t3 ], the dynamism of the inventory is governed by the following
differential equation and influenced by the occurrence of demand, deterioration, and the
arrival of re-do processed items from the production unit.

d
IR1 (t) = R − a + bt − ϕ2 IR1 (t)


(9)
dt
Using the condition IR1 (t3 ) = 0, we obtain the inventory level at 0 t0 in the RW 1
represented as
!
1 − e ϕ2 ( t3 − t ) 1  
IR1 (t) = ( R − a) + −bt + bt3 e ϕ2 (t3 −t) , t ∈ [t2 , t3 ] (10)
ϕ2 logb + ϕ2

Once the items in the RW become empty, the arriving demands are channelized to OW.
The items stored in the OW decrease by the occurrence of both demand and deterioration
in the interval [t3 , t4 ].
The governing equation representing the inventory level at any t ∈ [t3 , t4 ] is

d
IO (t) = − a + bt − ϕ1 IO (t)


(11)
dt
Mathematics 2023, 11, 3986 11 of 24

Using the condition IO (t4 ) = 0, we obtain

!
e − ϕ1 ( t − t4 ) − 1 1  
IO (t) = a + −bt + bt4 e− ϕ1 (t−t4 ) , t ∈ [t3 , t4 ] (12)
ϕ1 logb + ϕ1

The total number of items produced up to time t2 is

Zt2
Pdt = Pt2
0

where the fraction of good quality items is αPt2 and the fraction of defective items is
(1 − α) Pt2 .

5. Cost Analysis, Total Cost Function, and Optimization

5.1. Cost Analysis
Cost functions involved in this model to optimize the total cost are as follows:

5.1.1. Production Cost

This price includes all processing, machine, labor, and material expenses.

PC = P1 Pt2 (13)

5.1.2. Setup Cost

It is the initial cost of establishing the production system which is a fixed price that
does not vary with quantity or time. It covers the cost for setups and changeovers.

SPC = SP (14)

5.1.3. Screening Cost

Inspection is performed at all stages of manufacture to guarantee the customers receive
only good products. Defective components are given away for re-do most of the times in
many of the situations when they are considered as a new one after being processed. It is
represented as the following:
SC = SC Pt2 (15)

5.1.4. Rework Cost

It includes the re-do processing, machine, labor, and material expenses.

RWE = RW (1 − α) Pt2 (16)

5.1.5. Rent for RW

It includes the cost paid for occupying the space to store excess items in RW.

REC = RC (17)

5.1.6. Holding Cost

The total holding cost in OW is estimated as follows:
Z t Z t3 Z t4

1
HC1 = HO IO (t)dt + IO (t)dt + IO (t)dt (18)
0 t1 t3

1 − e − ϕ1 t
Z t Z t      
1 1 1
−b + e− ϕ1 t dt
 t 
IO (t)dt = [αP − a] +
0 0 ϕ1 logb + ϕ1
Mathematics 2023, 11, 3986 12 of 24

( " #)
1 − e − ϕ1 t1
1 − e − ϕ1 t1
Z t  
1 t1 1 t1
IO (t)dt = [αP − a] + + logb 1 − b +
0 ϕ1 ϕ21 logb + ϕ1 ϕ1
Z t3 Z t3
Wn o
IO (t)dt = We ϕ1 t1 e− ϕ1 t dt = 1 − e − ϕ1 ( t3 − t1 )
t1 t1 ϕ1
Z t Z t  
4 4 a  ϕ1 ( t4 − t )  1
bt − bt4 e ϕ1 t4 e− ϕ1 t dt


IO (t)dt = e −1 −
t3 t3 ϕ1 logb + ϕ1

 h i
bt4 e ϕ1 (t4 −t3 ) − 1
!
a e ϕ1 ( t4 − t3 ) 1 1 logb(bt3 − bt4 ) +
= t3 − t4 + − + 
ϕ1 ϕ1 ϕ1 logb + ϕ1 ϕ1

Hence, the holding cost for OW is

"    o
1− e − ϕ1 t1 1− e − ϕ1 t1
n n n oo
t1
HC1 = HO (αP − a) ϕ1 + ϕ21
+ 1
logb+ ϕ1 logb(1 − bt1 ) + ϕ1 + W
ϕ1 1 − e − ϕ1 ( t3 − t1 )
  # (19)
e ϕ1 ( t4 − t3 ) bt4 [e ϕ1 {t4 −t3 } −1]
n o
a 1 1
+ ϕ1 t3 − t4 + ϕ1 − ϕ1 + logb+ ϕ1 logb(bt3 − b t4 ) + ϕ1

The total holding cost in RW 1 is estimated as follows:

Z t Z t3 
2
HC2 = H1 IR1 (t)dt+ IR1 (t)dt (20)
t1 t2

( " #  )
1 − e − ϕ2 ( t − t1 )
Z t2 Z t2 h
1 t − ϕ2 ( t − t1 )
i
IR1 (t)dt = [αP − a] + −b + bt1 e dt
t1 t1 ϕ2 logb + ϕ2

αP − a
 i  i
1 h ϕ2 ( t1 − t2 ) 1 t1 t2

bt1 h ϕ (t −t )
= [ t2 − t1 ] + e −1 + logb b − b − e 2 1 2 −1
ϕ2 ϕ2 logb + ϕ2 ϕ2
Z t3 Z t3 
a − R h ϕ2 ( t3 − t ) i 1 h i
IR1 (t)dt = e −1 + −bt + bt3 e ϕ2 (t3 −t) dt
t2 t2 ϕ2 logb + ϕ2
   
ϕ2 ( t3 − t2 ) − 1
a − R e
 i
 1 t2 t3

bt3 h ϕ2 ( t3 − t2 )
= − t3 + t2 + logb b − b − 1−e
ϕ2  ϕ2  logb + ϕ2 ϕ2

Hence, the total holding cost in RW 1 is

"( )
n o n o
αP− a 1 ϕ2 ( t1 − t2 ) 1 bt1 ϕ2 (t1 −t2 )
HC2 = H1 ϕ2 [ t2 − t1 ] + ϕ2 [ e − 1] + logb+ ϕ2 logb(bt1 − bt2 ) − ϕ2 [ e − 1]
( )# (21)
( e ϕ2 ( t3 − t2 ) −1)
n o n o
a− R 1 bt3 ϕ2 ( t3 − t2 ) ]
+ ϕ2 ϕ2 − t3 + t2 + logb+ ϕ2 logb(bt2 − bt3 ) − ϕ2 [1 − e

The total holding cost in RW 2 is

Z t2
HC3 = H2 IR2 (t)dt (22)
0

H2 (1 − α) Pt22
HC3 = (23)
2
 Mathematics 2023, 11, 3986 13 of 24

The total holding cost of a production cycle is

THC = HC1 + HC2 + HC3 (24)

5.1.7. Deterioration Cost

If there is a cost associated with the disposal of an item because of its deterioration, it
is derived as follows:
The deterioration cost in OW is
Z t Z t3 Z t 
1 4
DC1 = ϕ1 D1 IO (t)dt + IO (t)dt+ IO (t)dt (25)
0 t1 t3

    o
1− e − ϕ1 t1 1− e − ϕ1 t1
n n n oo
t1 1
1 − b t1 W
1 − e − ϕ1 ( t3 − t1 )


DC1 = ϕ1 D1 (αP − a) + ϕ1 ϕ21
+ logb+ ϕ1 logb + ϕ1 + ϕ1
 n   (26)
ϕ (t −t ) bt4 [e ϕ1 (t4 −t3 ) −1]
o
+ ϕa1 t3 − t4 + e 1 ϕ41 3 − 1
+ logb1+ ϕ logb bt3 − bt4 +


ϕ1 1 ϕ1

The deterioration cost in RW is

t2 Z t3
Z 
DC2 = ϕ2 D2 IR1 (t)dt+ IR1 (t)dt (27)
t1 t2

"
n n h io n h ioo
αP− a bt1
1
e ϕ2 ( t1 − t2 ) − 1 1
logb bt1 − bt2 − e ϕ2 ( t1 − t2 ) − 1


DC2 = ϕ2 D2 ϕ2 [ t2 − t1 ] + ϕ2 + logb+ ϕ2 ϕ2
   io
# (28)
( e ϕ2 ( t3 − t2 ) −1 )
n h
a− R bt3
1
b t2 − b t3 1 − e ϕ2 ( t3 − t2 )


+ ϕ2 ϕ2 − t3 + t2 + logb+ ϕ2 logb − ϕ2

Hence, the total deterioration cost for the entire production cycle is

TDC = DC1 + DC2 (29)

5.2. Total Cost Function and Optimization Algorithm

The entire production cost represents the sum of all of the following costs: production,
setup, rework, rental, holding, screening, and deterioration. Therefore, the total cost for the
entire production cycle is

TC = PC + SPC + SC + RWE + REC + THC + TDC (30)

The total cost for the entire production cycle per unit of time is

TC (t , t ) = 1 [ P Pt + SP + SC Pt2 + { RW (1 − α) Pt2 } + RC + ( HO
 2 4  t4 1  2  
1− e − ϕ1 t1
t1 1
n
t

1− e − ϕ1 t1 o
+ ϕ1 D1 ) (αP − a) ϕ1 + ϕ21
+ logb+ ϕ1 logb 1 − b + ϕ11
n n oo
+ W 1 − e − ϕ1 ( t3 − t1 )
ϕ1 n  
ϕ (t −t ) bt [e ϕ1 (t4 −t3 ) −1]
o
+ ϕa1 t3 − t4 + e 1 ϕ41 3 − ϕ11 + logb1+ ϕ1 logb(bt3 − bt4 ) + 4 ϕ1 + ( H1
hn n h io (31)
+ ϕ2 D2 ) αPϕ−2 a [t2 − t1 ] + ϕ12 e ϕ2 (t1 −t2 ) − 1
n oo
+ logb1+ ϕ2 logb bt1 − bt2 − btϕ21 [e ϕ2 (t1 −t2 ) − 1]


  ϕ (t −t )  io
R ( e 2 3 2 −1 )
n h
+ a− 1 t2 − bt3 − bt3 1 − e ϕ2 (t3 −t2 )


ϕ ϕ − t 3 + t 2 + logb+ ϕ2 logb b ϕ2
 2 2
H (1−α) Pt 2
+ 2 2 2

The total cost function and its concavity is represented in Figure 2.

Mathematics
Mathematics2023,
2023,11,
11,x 3986
FOR PEER REVIEW 15 14
ofof2524

Graphicalrepresentation
Figure2.2.Graphical
Figure representationofofthe
theconcavity
concavityofoftotal
totalcost
costfunction.
function.

Weoptimize
We optimize the
the above
aboveobjective
objectivecostcostfunction TC𝑇𝐶
function of the entire
of the production
entire cycle,cycle,
production which
depends on the parameters t ∗ and t∗∗ . ∗
which depends on the parameters
2 𝑡24 and 𝑡4 .

5.3.Optimizing
5.3. OptimizingAlgorithm
Algorithm
InIndifferential
differentialcalculus,
calculus, the
the theory
theory ofof optimization
optimizationofoffunctions
functionsofoftwotwovariables is ap-
variables is
plied in optimizing the total cost function. In the functioning of any automobile
applied in optimizing the total cost function. In the functioning of any automobile pro- production
machine,
duction its idle its
machine, time is time
idle essential to retain
is essential toits performance
retain efficiency
its performance and prolongation
efficiency and prolon-of
its lifetime.

gation of its∗lifetime.
Let t , t∗ be the desired optimum point which will minimize the objective function
Let (𝑡2∗2, 𝑡4∗4) be the desired optimum point which will minimize the objective function
TC (t , t ). The necessary condition to attain the local maximum or the local minimum
𝑇𝐶(𝑡22, 𝑡44). The necessary condition to attain the local maximum or the local minimum
points for the cost surface TC (t2 , t4 ) is [ TC (t2 , t4 )]t2 = 0 and [ TC (t2 , t4 )]t4 = 0. For negligi-
points for the cost surface 𝑇𝐶(𝑡2 , 𝑡4 ) is [𝑇𝐶(𝑡2 , 𝑡4 )]𝑡2 = 0 and [𝑇𝐶(𝑡2 , 𝑡4 )]𝑡4 = 0. For neg-
bly small values of l and l2 , we have
ligibly small values of1 𝑙1 and 𝑙2 , we have
∆=
∆ TC (t2++𝑙 l1, 𝑡, t4++𝑙l2)) −
=𝑇𝐶(𝑡 TC (t2 , t )
2 1 4 2 − 𝑇𝐶(𝑡2 , 𝑡44)

After
Afteromitting
omittinghigher powersofof𝑙l11 and l2𝑙2ininitsitsTaylors
higherpowers Taylorsexpansion,
expansion, weweobtain
obtain∆ approx-
∆ ap-
proximately
imately as as
1 n 2o2 2 
∆≈ 1 [{𝑙 {𝑇𝐶(𝑡 , 𝑡 )} + 𝑙 {𝑇𝐶(𝑡 , 𝑡 } } + 𝑙 {𝜓}] (32)
∆ ≈ 2[𝑇𝐶(𝑡2 , 𝑡4 )]𝑡 𝑡 l11{ TC (t22 , t44 )}𝑡t22𝑡t22 + l22 { TC (t22 , t44 𝑡}2t𝑡24t4 +2 l22 {ψ} (32)
2[ TC (t2 , t4 )]t2 t22 2
2
where 𝜓 = [{𝑇𝐶(𝑡2 , 𝑡4 )}𝑡2𝑡2 {𝑇𝐶(𝑡2 , 𝑡4 )}𝑡2𝑡4 − [{𝑇𝐶(𝑡2 , 𝑡4 }2𝑡2𝑡4 ] ].
where ψ = [{TC(t2 ,t4 )}t2 t2 {TC(t2 ,t4 )}t2 t4 − [{TC(t2 ,t4 }t2 ,t4 ] ].
From (32), we observe that ∆ > 0 if 𝜓 > 0 for 𝑙1 and 𝑙2 which are sufficiently
From (32), we observe that ∆ > 0 if ψ > 0 for l and l2 which are sufficiently small.
small. Optimization is attained by the following steps:1
Optimization is attained by the following steps:
Step 1: Derive the expressions: {𝑇𝐶(𝑡2 , 𝑡4 )}𝑡2 , {𝑇𝐶(𝑡2 , 𝑡4 )}𝑡4 , {𝑇𝐶(𝑡2 , 𝑡4 )}𝑡2𝑡2 , {𝑇𝐶(𝑡2 , 𝑡4 }𝑡2𝑡4
Step 1: Derive the expressions:{ TC (t2 , t4 )}t2 , { TC (t2 , t4 )}t4 , { TC (t2 , t4 )}t2 t2 , and
{ TC{𝑇𝐶(𝑡
and (t2 , t42)}, 𝑡4 )}𝑡.4𝑡4 .
t4 t4
Step 2: Solve {𝑇𝐶(𝑡 , 𝑡 )}𝑡2 = 0 and {𝑇𝐶(𝑡2 , 𝑡4 )}𝑡4 = 0 for critical points.
Step 2: Solve { TC (2t2 ,4t4 )} = 0 and { TC (t2 , t4 )} = 0 for critical points.
Step 3: Check and identifyt2 the critical points, sayt4 (𝑡̅2 , 𝑡̅4 ) which give the values of both
Step 3:
{𝑇𝐶(𝑡 Check and identify the critical points, say t2 , t4 which give the values of both
2 , 𝑡4 )}𝑡2 𝑡2 > 0 and 𝜓 > 0.
{ TC4:(tAmong
Step > points,
2 , t4 )}t2 t2the 0 and ψchose > 0. a point (𝑡̅2 , 𝑡̅4 ) which gives a minimum value to (𝑡2 , 𝑡4 ).
 
(𝑡̅2 ,points, ∗ ∗
StepSuch
4: Amongpoint the 𝑡̅4 ) = (𝑡chose
,
2 4 𝑡 ) a is the
point required
t t pointgives
2 4 which
, which minimizes
a minimum the to
value value
(t2 , tof
4 ).
∗ ∗
𝑇𝐶(𝑡2 , 𝑡4 ), and theminimum  total cost of the production cycle is 𝑇𝐶(𝑡 ,
2 4 𝑡 ).
t2∗ , t4∗ isis the


Such
The costpoint t2 , t4 =algorithm
optimization required
displayed as apoint
flow which
diagramminimizes
in Figure the value of
∗ ∗

3.
TC (t2 , t4 ), and the minimum total cost of the production cycle is TC t2 , t4 .
The cost optimization algorithm is displayed as a flow diagram in Figure 3.
Mathematics 2023, 11, x FOR PEER REVIEW 16 of 25
Mathematics 2023, 11, 3986 15 of 24

Figure 3. Cost optimization algorithm flow diagram.

6. Model Validation: Numerical Illustration and Sensitive Analysis

Figure 3. Cost optimization
6.1. Numerical algorithm flow diagram.
Illustration

6. Model TheValidation:
reliability, Numerical
accuracy, and flexibility
Illustration andof Sensitive
any inventory Analysis model is ensured by the
numerical example with appropriate performance metrics. We consider a particular en-
6.1. Numericalwith
vironment Illustration
the following parameter values: production rate of the production unit
as P The
= reliability,
70 items per accuracy, and flexibility
unit of time, screeningofrate anyofinventory
identifying modelthe is ensured by the
non-defective nu-as
items
merical
α = 0.86 example
per unitwith appropriate
of time, rate of performance metrics. We
re-doing the defective itemsconsider
by theasame particular environ-
production unit
immediately after the stop of production process as R = 29, rates of item deterioration=on
ment with the following parameter values: production rate of the production unit as 𝑃
70RW items
andper
OWunit of ϕ
are as time, screening
1 = 0.21 and ϕ2rate of identifying
= 0.19, respectivelythe non-defective
(since the inbuilt items 𝛼 RW
as in
facilities =
0.86 per unit
is higher of OW).
than time, The
rate parameter
of re-doinginthe thedefective
demand items rate Dby (t) the
is a same
= 68 and production
b = 0.85. unit
The
immediately after the stop of of
maximum accommodation items in OW
production is W as
process 𝑅 =items
= 200 29, rates
and of it isitem at t1 = 3on
deterioration
attained unit
𝑅𝑊 and 𝑂𝑊
of time. The are as 𝜑1 = cost
production 0.21forandan 𝜑item
2 = 0.19,
in a unit of time
respectively is P
(since
1 = 30
the money
inbuilt unit, the
facilitiessetup
in
𝑅𝑊costisper
higher is Sp𝑂𝑊
orderthan = ).
1800
Themoney unit, the
parameter in thescreening
demand costrateper𝐷(𝑡)
unit of 𝑎 = 68
is item Sc =and 𝑏=
8 money
unit,
0.85. themaximum
The rework cost per item in aof
accommodation unit of time
items in 𝑂𝑊 is Rwis 𝑊==15200 moneyitemsunit,and the
it isrental
attained cost
atfor
𝑡1 the
= 3utility RW up
unit ofoftime. Thetoproduction
the time point t3 =
cost for an9item
unit in unitisofRe
of atime time = 700
is 𝑃1money unit, the
= 30 money
holding
unit, cost of
the setup anper
cost item in OW
order in a=unit
is 𝑆𝑝 1800 of time
money is H o = the
unit, 4 money
screeningunit,costthe holding
per unit cost of an
of item
𝑆𝑐item
= 8 in RW1 in
money a unit
unit, theof time iscost
rework = 3 item
H1 per money in aunit.
unitThe holding
of time is 𝑅𝑤 cost = of15anmoney RW2the
item inunit, in a
unit of
rental time
cost foristhe = 4 money
H2 utility of 𝑅𝑊 unit,
upthetodeterioration
the time point cost𝑡3of=an 9 item
unit in ofOW timeinisa unit
𝑅𝑒 =of700 time
money = 6 money
is D1 unit, unit, cost
the holding the deterioration
of an item in 𝑂𝑊 cost inof aan item
unit of in
timeRWis in𝐻𝑜a = unit is D2the
of timeunit,
4 money =5
money unit. In the above specified environment, with the
holding cost of an item in 𝑅𝑊1 in a unit of time is 𝐻1 = 3 money unit. The holding cost help of MATLAB code, the
Mathematics 2023, 11, 3986 16 of 24

optimum values are arrived as follows: the optimum time points t2∗ = 6.48 and t4∗ = 10.25
which optimize the total cost as TC ∗ = 3266.09 money units for the entire production cycle.

6.2. Sensitive Analysis on Different Environments

The robustness and wholesomeness of any inventory model are ensured only when
the sensitivity of the parameters within the reasonable range are analyzed. It helps the
researchers to contribute more recommendations and suggestions to the investors in the
portfolio of supply chain management. Henceforth, the sensitivities of the deterioration
rate of the warehouses’ demand rate, production rate, and screening rate are tested in the
processes of optimizing the total cost.

6.2.1. Effect of Various Deterioration Rate in Optimizing Total Production Cycle Cost
We first analyze the sensitivity of the deterioration rate ϕ1 of the items in the OW by
varying it from 0.17 to 0.41 on arrival, TC ∗ in the same environment which was discussed
in numerical illustration Section 6.1. All observations are listed in the first part of Table 2,
from which we predict and suggest that an increase in the deterioration rate ϕ1 causes
fluctuation in TC ∗ with the effect of the increase in total production cycle duration t4∗ and
also it does not have an influence over the optimum production period t2∗ of the production
cycle. As more items deteriorate, the optimum total deterioration cost TDC ∗ increases, and
at the same time, the optimum total holding cost THC ∗ decreases. Figure 4 clearly exhibits
the stability of production and re-do durations and the changes of idle durations of the
production unit. Figure 5 illuminates the effect of the decrease in optimum total holding
cost and the increase in optimum total deterioration cost and optimum total cost of the
entire production cycle due to the fluctuation.

Table 2. Effect of various deterioration rates in RW and OW on optimizing total production cycle cost.

ϕ1 ↓ DP∗ ↓ t4∗ ↓ DR∗ ↓ DI∗ ↓ TDC∗ ↓ THC∗ ↓ TC∗ ↓

0.21 6.48 10.25 2.52 1.25 650.24 597.37 3266.09
0.25 6.48 10.67 2.52 1.67 684.26 565.88 3189.16
0.29 6.48 10.75 2.52 1.75 706.83 537.83 3169.27
Part I 0.33 6.48 10.72 2.52 1.72 723.69 514.74 3168.46
0.37 6.48 10.66 2.52 1.66 737.73 495.98 3174.55
0.41 6.48 10.59 2.52 1.59 749.07 480.26 3183.02
0.45 6.48 10.52 2.52 1.52 758.39 466.95 3192.00
ϕ2 ↓
0.20 5.91 10.16 3.09 1.16 665.06 580.43 3122.99
0.21 5.61 10.11 3.39 1.11 655.71 573.73 3034.31
Part II 0.22 5.45 10.07 3.55 1.07 652.41 557.64 2977.50
0.23 5.37 10.05 3.63 1.05 649.14 542.70 2940.46
0.24 5.35 10.04 3.65 1.04 645.60 528.73 2916.29
0.25 5.34 10.03 3.66 1.03 641.57 515.51 2900.78
0.26 5.34 10.02 3.66 1.02 638.42 504.62 2878.17

We consider the effect of fluctuating the deterioration rate ϕ2 of items in the RW by

varying it from 0.20 to 0.26 on arriving at the TC ∗ in the same environment. All observations
are listed out in part II of Table 2, from which we arrive at the conclusion that the increase
in the deterioration rate ϕ2 causes a decrease in TC ∗ as the effect of decrease in total
production cycle duration t4∗ and also there is a decrease in optimum production period t2∗
of the production cycle. As an effect, the TDC ∗ and THC ∗ values are decreases. Figure 6
clearly exhibits the influences of variation of deterioration rate ϕ2 on the slot of production
unit. It decreases the production time slot, increases the length of the re-do processing time
slot, and decreases the idle time slot of the production unit as well. Figure 7 illuminates the
effect of the decreasing trend of optimum total holding cost, optimum total deterioration
cost, and optimum total cost of the entire production cycle as an effect of the increase in ϕ2 .
 Mathematics 2023, 11, x FOR PEER REVIEW 18 of 25
Mathematics 2023, 11, x FOR PEER REVIEW 18 of 25
Mathematics 2023, 11, 3986 17 of 24
Figure 4. Effect of various deterioration rates 𝜑1 of 𝑅𝑊 on production unit slot.

Figure 5. Effect of various deterioration rates of 𝜑1 in 𝑅𝑊 on optimum costs.

Figure 4.Effect
Figure4.4.
Figure Effectofofvarious
variousdeterioration rates𝜑ϕ𝜑11of
deteriorationrates 𝑅𝑊on
ofofRW
𝑅𝑊 onon production
production
production unit
unit
unit slot.
slot.
slot.
1
We consider the effect of fluctuating the deterioration rate 𝜑2 of items in the 𝑅𝑊 by
varying it from 0.20 to 0.26 on arriving at the 𝑇𝐶 ∗ in the same environment. All ob-
servations are listed out in part II of Table 2, from which we arrive at the conclusion that
the increase in the deterioration rate 𝜑2 causes a decrease in 𝑇𝐶 ∗ as the effect of decrease
in total production cycle duration 𝑡4∗ and also there is a decrease in optimum production
period 𝑡2∗ of the production cycle. As an effect, the 𝑇𝐷𝐶 ∗ and 𝑇𝐻𝐶 ∗ values are decreases.
Figure 6 clearly exhibits the influences of variation of deterioration rate 𝜑2 on the slot of
production unit. It decreases the production time slot, increases the length of the re-do
processing time slot, and decreases the idle time slot of the production unit as well. Figure
7 illuminates the effect of the decreasing trend of optimum total holding cost, optimum
total deterioration cost, and optimum total cost of the entire production cycle as an effect
Figure
of
Figure 5. Effect of
the increase
5. Effect of various deterioration rates
𝜑2 . deterioration
invarious of ϕ𝜑11 ininRW
rates of 𝑅𝑊onon
optimum costs.
optimum
Figure 5. Effect of various deterioration rates of 𝜑1 in 𝑅𝑊 on optimum costs. costs.

Weconsider
We considerthe theeffect
effectofoffluctuating
fluctuatingthe thedeterioration
deteriorationrate rate𝜑𝜑2ofofitems
itemsininthethe𝑅𝑊𝑅𝑊by by
∗ 2
varying it from 0.20 to 0.26 on arriving at the 𝑇𝐶∗ in
varying it from 0.20 to 0.26 on arriving at the 𝑇𝐶 in the same environment. All ob- the same environment. All ob-
servationsare
servations arelisted
listedout outininpart
partIIIIofofTable
Table2,2,from
fromwhich
whichwe wearrive
arriveatatthe
theconclusion
conclusionthatthat
∗
the increase in the deterioration
the increase in the deterioration rate 𝜑 rate 𝜑 causes a decrease in 𝑇𝐶∗ as the effect
2causes a decrease in 𝑇𝐶 as the effect of decrease of decrease
∗2
in total production cycle duration ∗𝑡4 and also there is a decrease in optimum production
in total production cycle duration 𝑡4 and also there is a decrease in optimum production
period𝑡 ∗𝑡2∗ofofthe
period theproduction
productioncycle. cycle.As Asan aneffect,
effect,the 𝑇𝐷𝐶
the𝑇𝐷𝐶 ∗
∗
and𝑇𝐻𝐶
and 𝑇𝐻𝐶 ∗
∗ values are decreases.
values are decreases.
2
Figure6 6clearly
Figure clearlyexhibits
exhibitsthe theinfluences
influencesofofvariation
variationofofdeterioration
deteriorationraterate𝜑𝜑2 on onthe
theslot
slotofof
2
production unit. It decreases the production time slot, increases
production unit. It decreases the production time slot, increases the length of the re-do the length of the re-do
processing time slot, and decreases the idle time slot of the production
processing time slot, and decreases the idle time slot of the production unit as well. Figure unit as well. Figure
7 7illuminates
Mathematics 2023, 11, x FOR PEER REVIEW
illuminatesthe theeffect
effectofofthethedecreasing
decreasingtrend trendofofoptimum
optimumtotal totalholding
holdingcost, cost,optimum
optimum
19 of 25
totaldeterioration
total deteriorationcost, cost,andandoptimum
optimumtotal totalcost
costofofthe
theentire
entireproduction
productioncycle cycleasasan aneffect
effect
of the
Figure increase
6. Effect
of the increase in 𝜑 . in
of 𝜑
various
2 . deterioration rates of ϕ in OW on production unit slot.
Figure 6. Effect of various
2 deterioration rates of 𝜑2 in O𝑊 on production unit slot.
2

Figure 7. Effect of various deterioration rates of ϕ2 in OW on optimum costs.

Figure 7.6.Effect
Figure6. ofofvarious
Effectof deterioration
variousdeterioration rates
deteriorationrates ofof𝜑𝜑2 2 ininO𝑊
ratesof on
O𝑊on optimum costs.
onproduction
production unitslot.
slot.
Figure Effect various 𝜑2 in O𝑊 unit
6.2.2. Effect of Various Demand Rate in Optimizing Total Production Cycle Cost
6.2.2. Effect of Various Demand Rate in Optimizing Total Production Cycle Cost
The optimum cost functions and the slot of the production unit are listed in Table 3
The optimum
for varying cost functions
the constant demandand the slotaofand
parameter thethe
production unit are listed in demand
advertisement-influenced Table 3
for varying the constant demand parameter 𝑎 and the advertisement-influenced demand
parameter 𝑏. From observation of part I in Table 3, as we vary the value of demand pa-
rameter 𝑎 from 52 to 76, production slots 𝐷𝑅 ∗ and 𝐷𝐼 ∗ are decreased, and as a result,
both 𝑇𝐷𝐶 ∗ and 𝑇𝐻𝐶 ∗ are decreased which influence the decrease in 𝑇𝐶 ∗ , and at the same
time, 𝐷𝑃 ∗ increases. Figure 8 clearly exhibits the production slot variations and Figure 9
 Figure 7. Effect of various deterioration rates of 𝜑2 in O𝑊 on optimum costs.

6.2.2. Effect of Various Demand Rate in Optimizing Total Production Cycle Cost
Mathematics 2023, 11, 3986 The optimum cost functions and the slot of the production unit are listed in Table 18 of 324
for varying the constant demand parameter 𝑎 and the advertisement-influenced demand
parameter 𝑏. From observation of part I in Table 3, as we vary the value of demand pa-
∗
rameter
parameter𝑎 from 52 toobservation
b. From 76, productionof part 𝐷𝑅Table
slotsI in and3,𝐷𝐼as∗ are
we decreased,
vary the valueand asof ademand
result,
∗ ∗ ∗
both 𝑇𝐷𝐶 𝑇𝐻𝐶 which ∗
influence the ∗
parameter a from 52 to 76, production slots DR and DI are decreased, and as a same
and are decreased decrease in 𝑇𝐶 , and at the result,
∗ ∗
both 𝐷𝑃
time, TDCincreases.
and THC ∗
Figure
are 8decreased
clearly exhibits
whichthe production
influence slot variations
the decrease in TCand∗ Figure
, and at the9
illuminates ∗
same time,the DPeffect of the decrease
increases. Figure 8inclearly
optimum total the
exhibits holding cost, optimum
production total dete-
slot variations and
rioration
Figure 9 cost, and optimum
illuminates the effecttotal costdecrease
of the of the entire production
in optimum total cycle.
holding cost, optimum total
deterioration cost, and optimum total cost of the entire production cycle.
Table 3. Effect of various demand rates in optimizing total production cycle cost.
Table 3. Effect of various
∗ demand
∗ rates in optimizing
∗ total
∗ production
∗ cycle cost.
∗
𝒂 ↓ 𝑫𝑷 ↓ 𝒕𝟒 ↓ 𝑫𝑹 ↓ 𝑫𝑰 ↓ 𝑻𝑫𝑪 ↓ 𝑻𝑯𝑪 ↓ 𝑻𝑪∗ ↓
a↓ DP∗ ↓ 52 t∗ ↓ 5.67 10.71
DR ∗↓ 3.33
DI ↓ 1.71
∗ TDC 1078.62
∗
↓ 984.03
THC ∗
↓ 3782.18
TC∗ ↓
4
56 5.88 10.59 3.12 1.59 975.07 890.93 3660.66
52 5.67 10.71 3.33 1.71 1078.62 984.03 3782.18
56 5.88 60 10.59 6.09 10.48
3.12 2.911.59 1.48 869.15
975.07 795.15
890.93 3535.01
3660.66
60 Part
6.09 I 64 10.48 6.29 10.36
2.91 2.711.48 1.36 761.43
869.15 761.43
795.15 3402.43
3535.01
Part I 64 6.29 68 10.36 6.48 2.71
10.25 2.521.36 1.25 761.43
650.24 761.43
597.37 3402.43
3266.09
68 6.48 72 10.25 6.67 2.52
10.14 2.331.25 1.14 650.24
537.26 597.37
494.90 3266.09
3125.12
72 6.67 10.14 2.33 1.14 537.26 494.90 3125.12
76 6.84 76 10.02 6.84 10.02
2.16 2.161.02 1.02 421.32
421.32 389.93
389.93 2979.71
2979.71
𝑏 ↓
b↓
0.86 5.65 10.39 3.35 1.39 659.59 604.83 3031.46
0.86 5.65 10.39 3.35 1.39 659.59 604.83 3031.46
0.87 5.15 10.50 3.85 1.50 658.21 602.69 2875.75
0.87 5.15 10.50 3.85 1.50 658.21 602.69 2875.75
0.88 4.81 0.8810.58 4.81 10.58
4.19 4.191.58 1.58 653.99
653.99 598.41
598.41 2764.84
2764.84
Part II 0.89 Part
4.57 II 0.8910.65 4.57 10.65
4.43 4.431.65 1.65 648.97
648.97 593.38
593.38 2681.60
2681.60
0.9 4.39 0.910.71 4.39 4.61
10.71 4.611.71 1.71 644.02
644.02 588.52
588.52 2616.56
2616.56
0.91 4.24
0.9110.76 4.24 4.76
10.76 4.761.76 1.76 640.40
640.40 585.19
585.19 2564.03
2564.03
0.92 4.12 10.81 4.88 1.81 636.38 581.03 2520.92
0.92 4.12 10.81 4.88 1.81 636.38 581.03 2520.92

Mathematics 2023, 11, x FOR PEER REVIEW 20 of 25

Figure
Figure8.8.Effect
Effectofofvarious
variousdemand ratesofof𝑎a on production unit slot.
demandrates

Effectofofvarious
Figure9.9.Effect
Figure variousdemand ratesofof𝑎a on optimum costs.
demandrates

Fromobservation
From observationofofpart
partIIIIininTable
Table3,3,asaswe
wevary
varythe
thevalue
valueofof demand
demand parameter𝑏 b
parameter
∗ ∗ ∗
from 0.86 to 0.92, production
from 0.86 to 0.92∗, production slot DP decreases but DR and DI
slot 𝐷𝑃 ∗ decreases but 𝐷𝑅 ∗ and 𝐷𝐼 ∗ increase, increase, andasasaa
and
∗ ∗
result, both TDC
result, both andTHC
𝑇𝐷𝐶 ∗ and 𝑇𝐻𝐶 ∗decrease;
decrease;thus,thus,influencing
influencinga decreased TC .𝑇𝐶
a decreased Figure
∗ 10 clearly
. Figure 10
clearly exhibits the production slot variations and Figure 11 illuminates the effect of a de-in
exhibits the production slot variations and Figure 11 illuminates the effect of a decrease
crease in optimum total holding cost, optimum total deterioration cost, and optimum total
cost of the entire production cycle.
 Figure
Figure9.9.Effect
Effectofofvarious
variousdemand ratesofof 𝑎𝑎 on
demandrates onoptimum
optimumcosts.
costs.

From
Fromobservation
observationof ofpart
partIIIIininTable
Table3,3,as
aswe
wevary
varythe
thevalue
valueofofdemand parameter 𝑏𝑏
demandparameter
∗∗ ∗∗ ∗∗
from 0.86 0.92 production slot 𝐷𝑃 decreases but 𝐷𝑅
from 0.86 to 0.92, production slot 𝐷𝑃 decreases but 𝐷𝑅 and 𝐷𝐼 increase,and
to , and 𝐷𝐼 increase, as
and19asa
Mathematics 2023, 11, 3986 ∗∗ ∗∗ ∗∗
of a
24
result, both 𝑇𝐷𝐶 and 𝑇𝐻𝐶 decrease; thus, influencing a decreased
result, both 𝑇𝐷𝐶 and 𝑇𝐻𝐶 decrease; thus, influencing a decreased 𝑇𝐶 . Figure 10 𝑇𝐶 . Figure 10
clearly
clearlyexhibits
exhibitsthe
theproduction
productionslotslotvariations
variationsandandFigure
Figure11
11illuminates
illuminatesthe
theeffect
effectof
ofaade-
de-
crease
creaseininoptimum
optimumtotaltotalholding
holdingcost,
cost,optimum
optimumtotaltotaldeterioration
deteriorationcost,
cost,and
andoptimum
optimumtotal
total
optimum
cost total holding cost,cycle.
optimum total deterioration cost, and optimum total cost of
costof
ofthe
theentire
entireproduction
production cycle.
the entire production cycle.

Figure 10.
Figure
Figure 10.Effect
10. Effectofofof
Effect various
variousdemand
various rates
demand
demand rates
rates of𝑏𝑏b on
ofof onproduction
on productionunit
production unitslot.
unit slot.
slot.

Figure
Figure
Figure 11. Effect
11.Effect
11. Effectofofof various
various
various demand
demand
demand rates
rates
rates of𝑏𝑏b on
ofof on optimum
onoptimum costs.
optimumcosts.
costs.
6.2.3. Effect of Various Production Rate in Optimizing the Total Production Cycle Cost
6.2.3.
6.2.3.Effect
Effectof ofVarious
VariousProduction
ProductionRateRatein inOptimizing
Optimizingthe theTotal
TotalProduction
ProductionCycle CycleCost
Cost
In any production inventory model, the production rate is the more essential parameter
In any production inventory model, the production rate is the more essential param-
that In any production
influences all otherinventory model, theand
model parameters production rate is the
cost functions. Themore
effectessential param-
of changing the
eter
eterthat
that influences
influences all
allother
other model
model parameters
parameters and
and cost
costfunctions.
functions. The
The effect
effect of
ofchanging
changing
∗ ∗
production rate P over a range of 65 to 95 is shown in Table 4. The increase in DR and DI ∗∗
the
theproduction
production rate
rate 𝑃𝑃 over
over aarange
range
∗ of∗ 65
of 65 toto 95∗ isisshown
95 shown in
inTable
Table 4.4.The
The increase
increase∗ inin 𝐷𝑅
𝐷𝑅
influence
∗ the increase in TDC , THC ,∗ and TC even if there is a decrease in DP . Figure 12
and 𝐷𝐼 influence the increase 𝑇𝐷𝐶 ∗, 𝑇𝐻𝐶 ∗ ∗, and 𝑇𝐶 ∗ ∗ even if there is a decrease in 𝐷𝑃 ∗ ∗.
and 𝐷𝐼 ∗ exhibits
clearly influence thethe increaseininslot
production 𝑇𝐷𝐶 , 𝑇𝐻𝐶 , and
variations and𝑇𝐶 even
Figure 13ifilluminates
there is a decrease 𝐷𝑃an
in of
the effect .
Figure
Figure 1212 clearly
clearly exhibits
exhibits the
the production
production slot
slot variations
variations and
and Figure
Figure 13
13 illuminates
illuminates the
the
increase in optimum total holding cost, optimum total deterioration cost, and optimum
total cost of the entire production cycle.

Table 4. Effect of various production rates in optimizing total production cycle cost.

P↓ DP∗ ↓ t4∗ ↓ DR∗ ↓ DI∗ ↓ TDC∗ ↓ THC∗ ↓ TC∗ ↓

65 6.87 10.17 2.13 1.17 487.45 447.02 2970.23
70 6.48 10.25 2.52 1.25 650.24 597.37 3266.09
75 6.13 10.42 2.87 1.42 801.61 736.68 3547.50
80 5.81 10.57 3.19 1.57 946.55 870.00 3816.4
85 5.52 10.71 3.48 1.71 1086.09 998.04 4074.33
90 5.26 10.84 3.74 1.84 1220.02 1120.66 4322.54
95 5.01 10.96 3.9 1.96 1351.55 1241.06 4562.03
 70 6.48 10.25 2.52 1.25 650.24 597.37 3266.09
75 6.13 10.42 2.87 1.42 801.61 736.68 3547.50
80 5.81 10.57 3.19 1.57 946.55 870.00 3816.4
85 5.52 10.71 3.48 1.71 1086.09 998.04 4074.33
Mathematics 2023, 11, 3986 90 5.26 10.84 3.74 1.84 1220.02 1120.66 4322.54
20 of 24
95 5.01 10.96 3.9 1.96 1351.55 1241.06 4562.03

Figure12.
Figure Effect
12.Effect ofof various
various production ratesofof𝑃P on
productionrates on production
production unit
unit slot.
slot.

Figure13.
Figure Effectofofvarious
13.Effect variousproduction ratesofof𝑃P on
productionrates on optimum
optimum costs.
costs.

6.2.4. Effect of Various Rental Cost in Optimizing the Total Production Cycle Cost
6.2.4. Effect of Various Rental Cost in Optimizing the Total Production Cycle Cost
In the two-warehouse inventory model, the rental cost affects the cost functions. The
In thechanging
effect of two-warehouse inventory
the rental model,
cost Re over the rental
a range from cost
700 to affects
6700 the cost functions.
is shown in Table 5.The
The
effect of changing
increase the rentalthe
in DI ∗ influences cost 𝑅𝑒 over
increase in aTDC ∗ from∗ 700 to 6700
range, THC , and TC ∗ . Figure is shown in Table
14 clearly 5.
exhibits
∗ ∗ ∗ ∗
The increase in 𝐷𝐼 influences the increase in 𝑇𝐷𝐶 , 𝑇𝐻𝐶 , and 𝑇𝐶 . Figure
the rental cost variations and Figure 15 illuminates the effect of the increase in optimum 14 clearly ex-
hibits
totalthe rentalcost,
holding cost optimum
variationstotal
and deterioration
Figure 15 illuminates
cost, andthe effect oftotal
optimum the increase in opti-
cost of the entire
mum total holding
production cycle. cost, optimum total deterioration cost, and optimum total cost of the
entire production cycle.
Table 5. Effect of various rental cost of RW in optimizing total production cycle cost.
Table 5. Effect of various rental cost of 𝑅𝑊 in optimizing total production cycle cost.
Re ↓ DP∗ ↓ t4∗ ↓ ∗ DR∗ ∗ ↓ ∗
∗ DI ↓ ∗ TDC∗ ↓ ∗ THC∗ ↓∗ ∗
TC ↓
𝑹𝒆 ↓ 𝑫𝑷 ↓ 𝒕𝟒 ↓ 𝑫𝑹 ↓ 𝑫𝑰 ↓ 𝑻𝑫𝑪 ↓ 𝑻𝑯𝑪 ↓ 𝑻𝑪 ∗ ↓
700 6.48 700 10.25 6.48 2.52
10.25 2.521.25 1.25 650.24
650.24 597.37
597.37 3266.09
3266.09
1700 6.48 10.31 2.52 1.31 657.22 602.42 3363.36
1700 6.48 10.31 2.52 1.31 657.22 602.42 3363.36
2700 6.48 10.36 2.52 1.36 663.21 606.80 3460.10
2700
Mathematics 2023, 11, x FOR PEER REVIEW
3700 6.48 10.42 6.48 10.36
2.52 2.521.42 1.36 663.21
667.45 606.80
612.24 3460.10
22 of 25
3556.36
4700 6.48 370010.47 6.48 10.42
2.52 2.521.47 1.42 667.45
677.03 612.24
616.91 3556.36
3652.05
5700 6.48 470010.53 6.48 2.52
10.47 2.521.53 1.47 684.92
677.03 622.72
616.91 3747.27
3652.05
6700 6.48 5700 10.58 6.48 2.52
10.53 2.521.58 1.53 691.68
684.92 627.81
622.72 3842.02
3747.27
6700 6.48 10.58 2.52 1.58 691.68 627.81 3842.02

Figure14.
Figure Effectofofvarious
14.Effect variousrental
rentalcosts RW on
costsofof𝑅𝑊 on production
production unit
unit slot.
slot.
Mathematics 2023, 11, 3986 21 of 24
Figure 14. Effect of various rental costs of 𝑅𝑊 on production unit slot.

Figure15.
Figure Effectofofvarious
15.Effect variousrental
rentalcosts RWon
costsofof𝑅𝑊 onoptimum
optimumcosts.
costs.

7. Conclusions and Future Research Directions

7. Conclusions and Future Research Directions
The two-warehouse production inventory with three different states of the production
The two-warehouse production inventory with three different states of the produc-
unit are called the production slot, re-do slot, and idle slot and produce the new items,
tion unit are called the production slot, re-do slot, and idle slot and produce the new items,
re-do the identified defective items, and are in an idle state, respectively. The optimum
re-do the identified defective items, and are in an idle state, respectively. The optimum
total production cycle cost is explicitly arrived at with respect to the optimization variables’
total production cycle cost is explicitly arrived at with respect to the optimization varia-
total production slot time and total cycle duration. It was achieved in the environment of
bles’ total production slot time and total cycle duration. It was achieved in the environ-
different deterioration rates in each warehouse with a common demand rate. An analytic
ment of different deterioration rates in each warehouse with a common demand rate. An
expression for the total production cycle cost is arrived at and optimized analytically by
analytic expression for the total production cycle cost is arrived at and optimized analyti-
the discriminant method. A numerical illustration is provided in a particular sustainable
cally by the discriminant method. A numerical illustration is provided in a particular sus-
environment. The sensitivity of the parameters, deterioration rates, demand rates, and pro-
tainable
ductionenvironment. The sensitivity
rates are analyzed of the parameters,
and observations are tabulateddeterioration rates, demand
with diagrammatic rates,
exploration.
and
The importance of maintaining the parameter values in arriving at the optimum total ex-
production rates are analyzed and observations are tabulated with diagrammatic cost
ploration.
are explored Thein importance
the tables of and maintaining
figures as athe parameter
suggestion andvalues in arriving atwhich
recommendation the optimum
are more
total cost are
essential explored
to any investor in who
the tables and with
is dealing figures as a suggestion
deteriorated inventoryand with
recommendation
an integrated
which are more essential to any investor who is dealing with deteriorated
production unit facility. Some of the main observations are an increase in deterioration inventory with rate
an integrated
results production
in a decrease in theunitoptimum
facility. Some of the
total cost main
of the observations
system are of
as a result anaincrease
decreaseinin
deterioration
holding costsrate andresults in a decrease
an increase in the optimum
in deterioration total cost
costs; an increase inof
thethe systemparameter
constant as a resultof
ofthe
a decrease
demand functionin holding costs and
decreases the an increasetotal
optimum in deterioration
cost as the total costs;
cycleantime
increase in thean
decreases;
constant parameter of the demand function decreases the optimum
increase in the advertisement parameter decreases the optimum total cost as the production total cost as the total
cycle time decreases; an increase in the advertisement parameter
slot decreases; an increase in production rate improves the optimum total cost; and an decreases the optimum
total cost in
increase as rental
the production
cost increases slot thedecreases;
optimum antotal
increase in the
cost of production
cycle. rate improves the
optimum Thetotal
workcost;
willand
leadan increase intowards
researchers rental cost
the increases
spectrumthe of an optimum total cost
inbuilt service of theto
station
cycle.
enhance the satisfactory level of arriving demands, possible integrated server vacation
Thetrade
policy, workcredit
will lead researchers
policies, moneytowardsinflation,the
andspectrum of an inbuilt
partial delay payment service stationcost
of different to
enhance
functions. theAsatisfactory
new venture level of arriving
is gained demands,
in the directionpossible integrated
of searching for and server vacation
optimizing the
policy, trade credit policies, money inflation, and partial delay payment
total cost by either fixing the sufficient idle time period for the production system which of different cost
functions.
enables us Ato new venture
retain is gained
the quality in production
of the the direction of and
unit searching
prolong foritsand optimizing
lifetime for thethe
RW
total cost by either
or essential fixingtime
production the sufficient
period which idle boosts
time period forrevenue
the total the production system which
as we entertain the RW
with infinite space or an unavoidable re-do processing time in order to generate money to
avoid loss on defective items, as there is no guarantee that any manufacturing machine can
produce perfect items 100% of the time.

Author Contributions: Conceptualization, V.J. and T.R.; methodology, T.R., V.S. and V.J.; software,
S.S., V.S. and R.C.; validation, V.J. and R.C.; formal analysis, T.R., R.C. and V.S.; investigation, V.J. and
V.S.; resources, S.S., V.S. and R.C.; data curation, V.S. and R.C.; writing—original draft preparation,
T.R. and R.C.; writing—review and editing, V.J., T.R. and R.C.; visualization, S.S., V.S. and R.C.;
supervision, V.S. All authors have read and agreed to the published version of the manuscript.
Funding: This research received no external funding.
Data Availability Statement: All data in this study are provided in the present manuscript.
Conflicts of Interest: The authors declare no conflict of interest.
Mathematics 2023, 11, 3986 22 of 24

Notations
Notations used in this model are as follows:

IO (t) Inventory level at 0 t0 in the OW.

RW 1 First block of the RW, which is stored to use the good quality items excess of OW.
RW 2 Second block of the RW, which is stored to use for defective items.
IR1 (t) Inventory level at 0 t0 in RW 1 .
IR2 (t) Inventory level at 0 t0 in RW 2 .
α Screening Rate of identifying the non-defective items.
P Production rate of the production unit.
R Rate of rework of defective item.
ϕ1 Rate of occurrence of deterioration in a unit of time for the items inOW.
ϕ2 Rate of
deterioration occurred in a unit of time for the items inRW.
a + bt Demand rate for the items, where a,b > 0; where 0 a0 is constant demand
D (t) rate parameter, and 0 b0 is advertisement-dependent parameter which is influenced
by time.
W Maximum accommodation ofOW.
P1 Production cost per unit of item.
SP Setup cost per order.
SC Screening cost per unit of item.
RW Rework cost per unit of item.
RC Rental cost for the utility ofRW.
Ho Holding cost of an item in OW in a unit of time.
H1 Holding cost of an item in RW 1 in a unit of time.
H2 Holding cost of an item in RW 2 in a unit of time.
D1 Deterioration cost of an item in OW in a unit of time.
D2 Deterioration cost of an item in RW in a unit of time.
{ f ( x )} x Differentiation of f ( x ) with respect tox.
DP Optimal production duration of the production unit.
DR Optimal product re-do duration of the production unit.
DI Optimal idle duration of the production unit.
TDC Optimal total deterioration cost of the entire production cycle.
THC Optimal total holding cost of the entire production cycle.
TC Optimal total cost of the entire production cycle.

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