Optimization Letters (2022) 16:1935–1961

https://doi.org/10.1007/s11590-021-01815-z

ORIGINAL PAPER

An inventory model for multiple items assuming

time-varying demands and limited storage

Luis A. San-José1 · Manuel González-De-la-Rosa2 · Joaquín Sicilia3 ·

Jaime Febles-Acosta2

Received: 3 November 2020 / Accepted: 15 October 2021 / Published online: 30 November 2021
© The Author(s) 2021

Abstract
A model for inventory systems with multiple products is studied. Demands of items
are time-dependent and follow power patterns. Shortages are allowed and fully back-
logged. For this inventory system, our findings provide the efficient inventory policy
that helps decision-makers to obtain the initial inventory levels and the reorder points
that maximize the profit per unit time. Moreover, when it is assumed that the warehouse
used for the storage of products has a limited capacity, the optimal inventory policy
is also developed. The model presented here extends some inventory systems studied
by other authors. Numerical examples are introduced to illustrate the applicability of
the theoretical results presented.

Keywords Inventory system · Multiple items · Time-dependent demand · Full

backlogging · Reorder points

B Luis A. San-José
[email protected]
Manuel González-De-la-Rosa
[email protected]
Joaquín Sicilia
[email protected]
Jaime Febles-Acosta
[email protected]

1 IMUVA, Department of Applied Mathematics, School of Computer Engineering, University of

Valladolid, Valladolid, Spain
2 Department of Business Management and Economic History, Faculty of Economics, University
of La Laguna, La Laguna, Tenerife, Canary Islands, Spain
3 Department of Mathematics, Statistics and Operations Research, Faculty of Mathematics, University
of La Laguna, La Laguna, Tenerife, Canary Islands, Spain

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1936 L. A. San-José et al.

1 Introduction

In periods of economic crisis, companies have to reduce costs at all stages of the
production-storage-distribution system. The general purpose is to seek the most effi-
cient allocation of available resources. The decrease in costs related to the activities of
the supply chain promotes an increase in business productivity and net profit. Inven-
tory control and management is a fundamental activity of organizations and it is vital
for the development of product sales and the marketing process. This is one of the dis-
ciplines most studied by academics to assist in management decision-making related
to logistics and the commercial distribution of goods. In recent years, researchers
have carried out deeper analyses of inventory models whose main objectives consist
in determining the best inventory policies so that customer demand is satisfied and the
total inventory cost function is minimized.
The classical inventory models consider that customer demand is known and con-
stant throughout time. However, in some real systems, the demand rate of an item can be
time-dependent. Thus, many researchers have analyzed new models where demands
vary with time during the inventory cycle. One of these models was developed by
Donaldson [6], who studied an inventory problem without shortages for items with
a linear demand rate. Ritchie [14] developed an economic ordering quantity model,
assuming demand increases linearly. Deb and Chaudhuri [5] studied the model of Don-
aldson [6] allowing shortages. Goswami and Chaudhuri [7] developed an economic
production quantity model for an inventory system with shortages and time-dependent
demand. Wu [28] analyzed a system for deteriorating items with time-varying demand
and allowing shortages. Sakaguchi [15] studied an inventory system considering time-
varying demand. Teng et al. [25] studied a model with quadratic demand rate assuming
partial backlogging. Agarwal [3] developed an inventory model with time-dependent
demand and reduction delivery policy. Li [10] studied optimal delivery strategies con-
sidering carbon emissions, time-dependent demands and demand–supply interactions.
More recently, Kumar and Singh [9] analyzed the optimal time policy for deteriorating
items of a two-warehouse inventory system with time and stock dependent demand
and partial backlogging. Afshar-Nadjafi et al. [2] studied a retailing system with time-
dependent demand and utility-sensitive sale price. Schlosser [20] analyzed the joint
stochastic dynamic pricing and advertising in an inventory model with time-dependent
demand. Tripathi and Kaur [26] presented a linear time-dependent deteriorating inven-
tory model with linearly time-dependent demand rate and inflation. Wang et al. [27]
studied a two-stage supply chain in a price-and-time dependent market with demand
leakage and producing curve. San José et al. [18] analyzed an inventory system with
discrete scheduling period, time-dependent demand and backlogged shortages.
In the classical inventory systems, to satisfy customer demand, it is supposed that
items are removed from inventory at a constant rate per unit time. However, in prac-
tice, there are other alternatives to withdraw quantities from the inventory. In this
line, Naddor [12] introduced the power demand pattern as an appropriate function to
describe other ways to take out stock units. This demand pattern extends the inventory
system with constant demand rate and can represent other customer demands. Thus,
the power demand pattern may model situations where the demanded quantity is lower

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An inventory model for multiple items assuming time-varying… 1937

at the beginning and then goes up over time. It can also represent the contrary situa-
tion, where demand is initially high and gradually decreases throughout the inventory
cycle. Therefore, the power demand pattern is a good approximation to fit customer
demand in inventory modeling.
Several researchers have developed models for different inventory systems consid-
ering a power demand pattern during the inventory cycle. See, for example, Rajeswari
and Vanjikkodi [13], Sicilia et al. [21], Mishra and Singh [11], Sicilia et al. [22, 23],
San José et al. [16, 17, 18], Keshavarzfard et al. [8], Adaraniwon and Omar [1] and
San José et al. [19]. In these papers, all the inventory systems refer to a single prod-
uct. However, in this work, we analyze a multi-item inventory system and present the
optimal inventory policy for that system.
In this inventory system for multiple products, demands are time-depending and
they follow power patterns. We analyze the model assuming full backlogging, that is,
the backorders are satisfied with the arrival of the next replenishment. This means that
customers would be willing to wait for the delivery of new merchandise to meet their
demands. Taking the assumptions of the inventory model into account, we formulate
the mathematical model and calculate the optimal scheduling period, the optimal
inventory levels at the beginning of the inventory cycle, the economic lot sizes, the
reorder points, the minimum inventory cost and the maximum profit per unit time. In
addition, to provide a more complete approach to making management decisions, we
calculate the optimal policy when it is assumed that the warehouse used for the storage
of products has a limited capacity. This assumption allows more realistic inventory
models to be studied.
The main contribution of this work is to determine the optimal inventory policy
when the items are jointly replenished and the storage capacity of the products is a
constraint of the inventory system. Thus, an algorithmic procedure is developed to
obtain the optimal inventory cycle and the optimal inventory level of each product
at the beginning of the scheduling period. To the best of our knowledge, this is the
first research work that simultaneously assumes the following characteristics: (i) the
inventory system considers multiple products, (ii) the demand rates of the items follow
power patterns, (iii) shortages are allowed and fully backlogged, and (iv) the warehouse
where the products are stored has a limited capacity.
The manuscript is structured as follows. Section 2 introduces the notation used in
the article and describes the properties of the inventory system to be studied. Section 3
analyzes the inventory model for multiple items with power demand patterns and
full backlogging. The problem of maximizing the profit per unit time for this model is
formulated and solved. Section 4 determines the optimal inventory policy for the multi-
item system with power demand patterns when there exists a limited storage capacity.
An efficient algorithm is proposed to solve this inventory problem. Section 5 presents
the optimal policy for the system with a fixed inventory cycle. Numerical examples to
illustrate the theoretical results previously obtained are introduced in Sect. 6. Finally,
in Sect. 7, we discuss some aspects of the optimal inventory policy proposed in this
paper and present some future research lines in inventory management.

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1938 L. A. San-José et al.

2 Notation and characteristics of the inventory system

In this section, we introduce the notation and the hypothesis of the inventory system
that is studied throughout the article.

2.1 Notation

The notation for the formulation of the inventory model is the following:
– N is the number of different items.
– T represents the length of the scheduling period or inventory cycle (decision vari-
able).
– Qi denotes the lot size or replenishment quantity of the i-th item, with i = 1,2, …,
N.
– S i represents the inventory level of the item i at the beginning of each inventory
cycle, with i = 1,2, …, N. Thus, after the replenishment sizes Qi are included in
the inventory, the stocks go up to the levels S i (decision variables).
– si denotes the replacement level or reorder point of the product i, with i = 1,2, …,
N; that is, si = S i – Qi . Thus, when the inventory level of the item i decreases to the
value si , then the inventory would be replenished.
–  is the set of possible inventory policies, that is,
 = {(S 1 , S 2 ,..., S N , T ) : 0 < T and 0 ≤ S i ≤ Qi , with i = 1,2, ..., N}.
– d i is the total demand of the i-th item (i = 1,2, …, N) along the inventory cycle.
– r i denotes the average demand per inventory cycle of the i-th item, that is,
r i = d i /T .
– Di (t) denotes the demand accumulated up to time t for the i-th item, for 0 ≤ t ≤ T .
– ni represents the index of demand pattern for the i-th item, with ni > 0.
– I i (t) is the net inventory level for the i-th item at time t, with 0 ≤ t ≤ T .
– τ i is the time in which the inventory level of the i-th item is zero.
– A represents the replenishing or ordering cost.
– W is the total space available in the warehouse to store the items.
– vi designates the storage space required per unit of the i-th item, with i = 1,2, …,
N.
– ci denotes the unit purchasing cost of the i-th item, for i = 1,2, …, N.
– pi represents the unit selling price of the i-th item, for i = 1,2, …, N.
– hi is the holding cost per unit time of a unit in stock of the i-th item, hi > 0, for i =
1,2, …,N.
– wi denotes the unit backlogging cost per unit time of the i-th article, wi > 0 for i =
1,2, …, N.

2.2 Assumptions

The inventory model is based on the following assumptions:

– The inventory under consideration is a periodic review system.

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An inventory model for multiple items assuming time-varying… 1939

– The inventory system considers various different items.

– Items are jointly replenished every certain time-period.
– The replenishment is instantaneous for all the products.
– Shortages are allowed and fully backlogged.
– The lead time of each item is considered null.
– The objective is to maximize the total profit per unit of time.
– Demand accumulated up to time t for the i-th item is time-dependent and is given
by
 1/n i  1/n i
t t
Di (t) = di = ri T , i = 1, 2, ..., N (1)
T T

For the i-th article, ni is the index of demand pattern. Note that if ni > 1, then a
greater part of demand occurs at the beginning of the period. If ni = 1, the demand rate
is constant throughout the scheduling period. Finally, when ni < 1, a larger portion of
demand occurs toward the end of the inventory cycle.
The demand rate at time t (with 0 < t < T ) for the i-th item (i = 1,2, ..., N) is
  1−ni
 ri t ni
Di (t) = (2)
ni T

This demand rate is known as the power demand pattern. Several authors, such as
Naddor [12], Rajeswari and Vanjikkodi [13], Mishra and Singh [11], San José et al.
[16, 17], Keshavarzfard et al. [8], and San José et al. [19] have studied inventory
systems considering this type of demand.
The net inventory level I i (t) for the i-th item at time t, with 0 ≤ t < T , is deduced from
the stock level at the beginning of the inventory cycle less the demand accumulated
up to time t, that is,
 1/n i
t
Ii (t) = Si − di , 0≤t <T (3)
T

The net inventory level I i (t) is a continuous and differentiable function on the time
interval [0,T ). This function starts with I i (0) = S i units and is decreasing throughout
the inventory cycle. Thus, there exists a time τ i in which the inventory level of the
i-th product drops to zero, that is, I i (τ i ) = 0. Next, the inventory level continues to
decrease and shortages occur.
At the end of the cycle, the inventory is replenished with a lot size of Qi units
when the inventory level of the item i decreases to the value si . Thus, the quantity -si
represents demand for the i-th item which is not met (backorders). The replenishment
quantity increases the stock up to level S i and the behavior of the inventory level is
repeated on the next scheduling period.
Figure 1 shows the fluctuations of the inventory level for the i-th product along
the inventory cycle, when demand follows a power demand pattern. The dashed lines
show the graphic of the net inventory level for the i-th item when the power demand
pattern is ni = 1 and the dotted curves draw the net inventory level when ni < 1.

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1940 L. A. San-José et al.

Fig. 1 Graphic of the net inventory level for the i-th item considering a power demand pattern

In the following paragraphs we analyze the inventory model for the system with
multiple products and present the optimal inventory policy when shortages are fully
backordered. Then, we develop the optimal policy assuming that a constraint on the
storage capacity is also incorporated to the model.

3 Inventory model for multiple items with power demand patterns

and fully backlogged shortages

Let us consider an inventory system with N items where the demand of each item
follows a power pattern. Shortages are allowed and completely backlogged. The
replacement of the products is carried out jointly every T time units. In this sys-
tem, demand d i along the inventory cycle is equal to r i T for each item i = 1,2, …, N.
The replenishing quantity or lot size Qi for the i-th item must be equal to the demanded
quantity in the period T . Thus, Qi = d i = r i T , for i = 1,2, …, N. As shortages are
allowed in this system, we have si ≤ 0, for i = 1,2, …, N. Thus, the maximum inventory
levels S i satisfy 0 ≤ S i ≤ Qi , because Qi = S i —si , for i = 1,2, …, N.
The evolution of the inventory level of any item is as follows. At the beginning of
the inventory cycle there are S i units in stock because the inventory has recently been
replenished, but as time passes and considering the effect of demand, the inventory
decreases until shortage occurs. Then it stays on shortage until the end of the inventory
cycle and a new replenishment of products is added to the inventory.
Let I H (S i ,T ) be the average amount in inventory and let I B (S i ,T ) be the average
shortage or backlogging for item i, with i = 1,2, …, N. If τ i denotes the exact point
in time when the i-th item inventory level drops to zero, that is, I i (τ ii ) = 0, then from
(3) we have

Sin i
τi = , i = 1, 2, ..., N (4)
rin i (T )n i −1

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Next, we have to determine the average amount carried in inventory I H (S i ,T ) and

the average shortage I B (S i ,T ) for each item i = 1,2, …, N. Evidently, these quantities
depend on the scheduling period T and on the initial stock level S i .
Thus, from (3) and (4), the average amount held in stock of the i-th item I H (S i ,T )
is given by

τi τi   1/n i   

1 1 t Si Si n i
I H (Si , T ) = Ii (t)dt = Si − ri T dt = (5)
T T T n i + 1 ri T
0 0

The average shortage in inventory I B (S i ,T ) for that i-th item is

T T   1/n i 
1 1 t
I B (Si , T ) = (−Ii (t))dt = ri T − Si dt
T T T
τi τi
 
n i ri T Si Si n i
= + − Si (6)
n i + 1 n i + 1 ri T

For each item i = 1,2, …, N, the holding cost per unit time is hi I H (S i ,T ) and the
backlogging cost per unit time is wi I B (S i ,T ). Thus, the total holding cost is given by


N 
N  
Si Si n i
C1 (S1 , . . . , S N , T ) = h i I H (Si , T ) = hi (7)
n i + 1 ri T
i=1 i=1

and the total backlogging cost is


N 
N   
n i ri T Si Si n i
C2 (S1 , . . . , S N , T ) = wi I B (Si , T ) = wi + − Si
n i + 1 n i + 1 ri T
i=1 i=1
(8)

The replenishing cost is C 3 (T ) = A/T . Moreover, the purchasing cost per unit time
is the sum of the purchasing costs of the N items divided by the inventory cycle T ,
that is


N
Qi  N
C4 = ci = ci ri (9)
T
i=1 i=1

Next, we can calculate the total cost function C(S 1 ,…,S N ,T ) per unit time related
to inventory management. Obviously, this cost function is the sum of the holding and
backlogging costs of all items, plus the replenishing cost and the purchasing cost.
Thus, the total inventory cost per time unit is


N  
Si Si n i
C(S1 , . . . , S N , T ) = (h i + wi )
n i + 1 ri T
i=1

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1942 L. A. San-José et al.

 
A 
N N
n i ri T
+ wi − Si + + ci ri (10)
ni + 1 T
i=1 i=1

Since the product sales revenue per unit time is


N
Qi  N
pi = pi ri (11)
T
i=1 i=1

the profit or gain G(S 1 ,…, S N , T ) per unit time is given by


N
G(S1 , . . . , S N , T ) = pi ri − C(S1 , . . . , S N , T ) (12)
i=1

The aim is to maximize the profit per unit time. From (12), it is obvious that
maximizing the function G(S1 , . . . , S N , T ) is equivalent to minimizing the inventory
cost per unit time.
Thus, our objective is to determine the optimal inventory cycle and the
optimal values of the initial inventory levels S i (i = 1,2, …, N) such that the cost func-
tion C(S 1 ,…, S N , T ), given in (10), is minimized on the region  = {(S 1 ,S 2 ,…,S N ,T ):
0 < T and 0 ≤ S i ≤ r i T, with i = 1,2, …, N}.

3.1 Optimal policy

In order to find the solution that minimizes the inventory cost per unit time shown in
(10), we first prove the convexity of the inventory cost function.
Theorem 1
(i) The inventory cost C(S 1 ,…, S N , T ) proposed in (10) is a strictly convex function
on the region RN+1
>0 ={(S 1 ,S 2 ,…,S N ,T ): T > 0, S i > 0, with i = 1,2, …, N}.
(ii) The optimal scheduling period is

A
T0 =   1/n i (13)
N wi n i ri wi
i=1 n i +1 1 − h i +wi

(iii) The optimal inventory levels that minimize the inventory cost function C(S 1 ,…,
S N , T ) are given by
 1/n i
wi A
Si0 = ri   1/n i , i = 1, 2, ..., N
h i + wi N wi n i ri wi
i=1 n i +1 1 − h i +wi

(14)

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An inventory model for multiple items assuming time-varying… 1943

 
Moreover, the point S10 , . . . , S N0 , T0 ∈ .
Proof
(i) The cost function (10) is a twice differentiable function. Thus, the first partial
derivatives of the cost function C(S 1 ,…, S N , T ) with respect to the variables S i
(i = 1,2, …, N) and T are given by:
 
∂C Si n i
= (h i + wi ) − wi , i = 1, 2, ..., N (15)
∂ Si ri T

N  n i   N
∂C −n i Si Si n i ri wi A
= (h i + wi ) +1
+ − 2 (16)
∂T ni + 1 ri T n i ni + 1 T
i=1 i=1

The second partial derivatives of the cost function C(S1 ,..., SN , T) are

∂ 2C n i Sin i −1
= (h i + wi ) > 0, i = 1, 2, ..., N (17)
∂ Si2 (ri T )n i
∂ 2C
= 0, i, j = 1, 2, ..., N and i = j (18)
∂ Si ∂ S j
 N  n i  
∂ 2C Si n i Si 2A
= (h i + w i ) + 3 >0 (19)
∂T 2 ri T n i +2 T
i=1
 n i
∂ 2C Si (−n i )
= (h i + wi ) < 0, i = 1, 2, ..., N (20)
∂ T ∂ Si ri T n i +1

  j n −1
n S i
Thus, from (17) to (20), we have det H j = i=1 (h i + wi ) (ri i Ti )ni > 0, for
j = 1,2, …, N, where H j is the leading principal minor of order j of the Hessian
matrix and

2A  n i Sin i −1
N
det(H N +1 ) = (h i + wi ) >0 (21)
T3 (ri T )n i
i=1

Therefore, as the Hessian matrix is positive definite, the cost function (10) is a
strictly convex function on the region RN+1
>0 .
(ii) Equating the partial derivatives (15) to zero, we get
 1/n i
wi
Si = ri T , i = 1, 2, ..., N (22)
h i + wi

Substituting the variables S i , with i = 1,2, ..., N, into Eq. (16) and setting this
equation to zero, we obtain the optimal scheduling period T 0 given by (13).
(iii) Now, substituting the optimal scheduling period T 0 in (22), we get the formula
(14) for the optimal inventory levels S i 0 , with i = 1,2, …, N.

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1944 L. A. San-José et al.

Note that both the inventory cycle T 0 and the optimal inventory levels S i 0 are
always strictly positive values (T 0 > 0 and S i 0 > 0, for i = 1, ..., N), because the input
parameters r i , wi and hi are strictly positive values for all items.
In addition, these solutions satisfy 0 < S i 0 < r i T 0 , for all i = 1,2, ..., N. Thus, the
optimal inventory policy (S 1 0 , S 2 0 ,.., S N 0 , T 0 ) belongs to the interior of the region
. 

The following result presents the minimum inventory cost and the optimal lot sizes.

Corollary 1
(i) The minimum inventory cost per unit time is given by

  1/n i  

N
wi n i ri wi
N
C0 = 4A 1− + ci ri (23)
ni + 1 h i + wi
i=1 i=1

(ii) The economic ordering quantities or optimal lot sizes are

A
Q i0 = ri   1/n i ,i = 1, 2, ..., N (24)
N wi n i ri wi
i=1 n i +1 1 − h i +wi

Proof (i) Substituting inventory levels given by (22) into Eq. (10), we get the total
inventory cost C 0 .
 
C0 = C S10 , . . . , S N0 , T0
N   1
ri T0 wi wi ni
= (h i + wi )
(n i + 1) (h i + wi ) h i + wi
i=1
  1
N
ni wi ni 1 N
+ wi ri T0 − +A + ci ri
ni + 1 h i + wi T0
i=1 i=1
  1/n i 
N
ni wi 1 N
= wi ri T0 1− +A + ci ri (25)
ni + 1 h i + wi T0
i=1 i=1

Now, substituting T 0 given by (13) into Eq. (25) leads to the minimum cost given
by (23).
(ii) The optimal lot sizes or economic order quantities are calculated by

Q i0 = ri T0 , for i = 1, 2, ..., N . (26)

Substituting the value of T 0 given by (13) in Eq. (26), we obtain the economic
ordering quantities given by (24). 

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An inventory model for multiple items assuming time-varying… 1945

Notice that the optimal reorder points si 0 , for i = 1,2, …, N, are calculated as si 0 =
S i – Qi 0 , with the initial levels S i 0 given by (14) and the optimal lot sizes Qi 0 given
0

in (24). That is,

 1/n i 
wi A
si0 = ri −1   1/n i , i = 1, 2, ..., N
h i + wi N wi n i ri wi
i=1 n i +1 1− h i +wi

(27)

From (12) and (23), the maximum profit or gain G0 per unit time is given by

  
N
G0 = G S10 , ..., S N0 , T0 = pi ri − C0 (28)
i=1

This is the best solution for the inventory problem when either there is no limit to
the capacity of the storage, or when the optimal inventory levels do not fill the available
warehouse capacity.

3.2 Particular cases

(i) If we have only a single article, that is, if we assume N = 1, then the optimal
policy given by (13) and (14) is equivalent to the optimal policy for an inventory
system with fully backlogged shortages and power demand pattern (see [21]).
(ii) In the particular case when the demand patterns of the N items are uniform, that
is, ni = 1, for all i = 1,2, …, N, the inventory policy obtained coincides with the
optimal policy for an inventory system with several items, constant demands,
allowing shortages and assuming that affected customers are willing to wait for
the next replenishment (see [12]).
(iii) Finally, considering both conditions simultaneously, that is, if N = 1 and n1
= 1, then the optimal policy obtained coincides with the efficient policy for
the inventory system with a single article, instantaneous replenishment, fully
backlogged shortages, and uniform demand (see [4], or [29]).

4 Inventory model for multiple items with power demand patterns,

backlogged shortages and limited storage

In this section, we study the optimal policy for the multi-item inventory system with
power demands and full backlogging, assuming that the total storage space available
in the warehouse is limited. Let W be the total available space in the warehouse for
all N items. Taking into account that vi represents the unit space of item i, with i =
1,2, …, N, and S i is the initial inventory level of the i-th item, then the total volume
of the N items must be less than or equal to the available storage space W . Thus, the

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1946 L. A. San-José et al.

following condition must be satisfied


N
vi Si ≤ W (29)
i=1

The objective function C(S 1 ,…,S N ,T ) for this inventory system is given by (10),
but we additionally consider the constraint of limited storage given in (29). Thus, the
new inventory problem is

   
Si n i 
N N
Si n i ri T
Min C(S1 , . . . , S N , T ) = (h i + wi ) + wi − Si
n i + 1 ri T ni + 1
i=1 i=1

A 
N
+ + ci ri
T
i=1

N
subject to vi Si ≤ W
i=1
0 ≤ Si ≤ ri T , for i = 1, 2, . . . , N (30)
0 <T

4.1 Optimal policy

The objective function of the above problem is convex and the constraints are linear
with respect to the decision variables, while the feasible region is a compact set. So,
the problem (30) has a unique optimal solution.
If the inventory levels S i 0 , with i = 1, 2, …, N, determined by (14), satisfy the
constraint (29), then they will be the optimal inventory levels because these values
meet the conditions of the problem (30). Otherwise, if the levels S i 0 , with i = 1,2, …,
N, do not satisfy the limited storage constraint, as the cost function C(S 1 ,…,S N ,T ) is
convex, then it is clear that the optimal inventory levels for the system with limited
storage must hold the equality in Eq. (29).
We can now use the Lagrangian multipliers technique to obtain the optimal inven-
tory cycle T* and the optimal inventory levels S i *, for i = 1,2, …, N. From the problem
(30), the Lagrangian function L is formed by the following expression

 N 

L(S1 , . . . , S N , T , λ) = C(S1 , S2 , ..., S N , T ) + λ vi Si − W (31)
i=1

where λ ≥ 0 is the Lagrangian multiplier. Hence, for an optimal solution, we have to

calculate the partial derivatives with respect to the variables S i (for i = 1,2, …, N), T

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An inventory model for multiple items assuming time-varying… 1947

and λ. This leads to

 
∂L Si n i
= (h i + wi ) − wi + λvi , i = 1, 2, ..., N (32)
∂ Si ri T
N  n i   N
∂L −n i Si Si n i ri wi A
= (h i + wi ) +1
+ − 2 (33)
∂T ni + 1 ri T n i ni + 1 T
i=1 i=1

∂L  N
= vi Si − W (34)
∂λ
i=1

Equating (32) to zero, we obtain

 1/n i
wi − λvi
Si = ri T , i = 1, 2, . . . , N (35)
h i + wi

Substituting S i given by (35) into Eq. (33) and setting this equation to zero, we have

A
T =   1+1/n i (36)
N n i ri wi −λvi
i=1 n i +1 wi − (h i + wi ) h i +wi

Note that, as λ ≥ 0, the inventory level S i given by (35) satisfies S i < r i T , for each
item i. Moreover, as these inventory level S i must be greater than or equal to zero,
then, from (35), λ has to be less than or equal to wi /vi , for i = 1,2,…,N. However, if
λ were greater than wi /vi , for some i, then S i must be zero. As, in this case, the items
must occupy the entire storage capacity W , the multiplier λ must satisfy the equation
f (λ) = 0, where f (λ) is the function given by

  1 
N  n i ri (h i + wi )  wi − λvi 
1+n i
wi − λvi ni W n i ri wi ni
f (λ) = vi ri −√ −
h i + wi A ni + 1 ni + 1 h i + wi
i∈I i=1 i∈I
(37)

with I = {i : wi − λvi ≥ 0}. Thus, we have to solve the above non-linear equation
f (λ) = 0 to determine the optimal value λ* of thevariable λ. Note thatf is a continuous
N
and strictly decreasing function with f (0) = T10 i=1 vi ri Si − W > 0 and f (λ) =
0

N n i ri wi
− √W i=1 n i +1 < 0 for λ ≥ max1≤i≤N {wi /vi }. Thus, the equation f (λ) = 0 has
A
a unique positive solution λ* on the interval [0, max1≤i≤N {wi /vi }].
Next, the optimal inventory cycle T* can be calculated as

A
T∗ =   1+ni (38)
N n i ri wi n i ri (h i +wi ) wi −λ∗ vi ni
i=1 n i +1 − i∈I  n i +1 h i +wi

123
1948 L. A. San-José et al.

where I  = {i : wi − λ∗ vi ≥ 0}. The optimal levels are given by S i * = 0 for i ∈ / I

and, by Eq. (35), for i ∈ I’, with λ = λ and T = T . The economic order quantities are
* *

given by Qi * = r i T * , for i = 1,2, …, N, the reorder points are calculated by si * = S i *

− Qi *, for i = 1,2, …, N and the minimum inventory cost is C* = C(S 1 *,…,S N *,T *).
Finally, the maximum profit G* per unit time is given by

  N
G ∗ = G S1∗ , ..., S N∗ , T ∗ = pi ri − C ∗ (39)
i=1

Note that the optimal inventory levels S i * are calculated after the optimal value λ*
of the multiplier is obtained solving the equation f (λ) = 0. Next, S i * = 0 if wi /vi ≤
λ* and S i * > 0 otherwise. Thus, once an item i corresponds to the level S i = 0, then
that item can never become S i > 0 for increased values of λ. Therefore, the levels S i
= 0 are binding constraints in this problem.
Relying on the previous results, we present the following efficient algorithm to solve
the inventory problem formulated in (30) for the multi-item system with power demand
patterns, backlogged shortages and limited storage. The minimum of C(S 1 ,…,S N ,T )
subject to the constraints is also provided by this procedure.
Algorithm 1 Step 1. Calculate T 0 by Eq. (13) and Si0 by using Eq. (14), for every i =
1, …, N.
Step 2. If i=1N
vi Si0 ≤ W , then Si∗ = Si0 , for i = 1, 2, ..., N , and T * = T 0 . Go to
Step 7.
Else, go to Step 3.
Step 3. Let λ0 = 0.
Step 4. Rearrange the wi /vi values into a sequence of N non-decreasing numbers
and let us designate them by λi , with i = 1,2, …, N. Thus, λi is the i-th smallest value.
Let λk be the first value of the set {λ1 , λ2 , …, λN } such that f (λk ) ≤ 0, with f (λ)
given by (37).
Step 5. Obtain λ∗ = arg λk−1 < λ ≤ λk { f (λ) = 0}.
Step 6. Calculate T * by using Eq. (38).
For i = 1 to N do  1/n i
∗v
If wi /vi ≥ λk then Si∗ = ri T ∗ whi i−λ
+wi
i
.
∗
else Si = 0.
Step 7. The economic lot sizes are Q i∗ = ri T ∗ , for i = 1, 2, ..., N ..
The reorder points are calculated by si∗ = Si∗ − ri T ∗ , for i = 1, 2, ..., N ..
From (10), calculate the minimum inventory cost C ∗ = C S1∗, ..., S N∗ , T ∗ . 
From (12), obtain the maximum profit per unit time G ∗ = G S1∗ , ..., S N∗ , T ∗ .
Remark 1. Note that the function f (λ) given by (37) is continuous and strictly decreas-
ing on the interval [λ0 , λN ], with f (λ0 ) > 0 and f (λN ) < 0. In step 4 of the previous
algorithm, the interval (λk-1 , λk ], where f (λk-1 ) > 0 ≥ f (λk ), is determined. Within that
interval there is the unique root of the equation f (λ) = 0.
This non-linear equation f (λ) = 0, with λ in the interval (λk-1 , λk ], can be solved
using a numerical approach such as the Newton–Raphson method (see e.g., [24]).

123
An inventory model for multiple items assuming time-varying… 1949

5 The inventory model with fixed scheduling period

In this section, we analyze the inventory system for multiple products, assuming power
demand patterns, a fixed inventory cycle, full backlogging and limited storage capacity.
Therefore, we assume here that the length of the inventory cycle is a known constant
TF.
We can now state some results analogous to those of Sect. 3. Thus, in this case, the
total inventory cost per time unit is

   
Si ni  
N N N
Si n i ri TF A
C F (S1 , . . . , S N ) = (h i + wi ) + wi − Si + + ci ri
n i + 1 ri TF ni + 1 TF
i=1 i=1 i=1
(40)

Note that the cost function C F (S 1 ,…, S N ) is the sum of N convex functions of S i .
Therefore, it is a convex function on the compact F = {(S 1 ,S 2 ,…,S N ): 0 ≤ S i ≤
r i T F , with i = 1,2, …, N} and has a unique optimal solution.
An analysis similar to that developed in the proof of Theorem 1 shows that the opti-
mal inventory levels that minimize the function C F (S 1 ,…, S N ), when the warehouse
capacity is not considered, are now given by

 1/n i
wi
0
S Fi = ri TF , i = 1, 2, ..., N (41)
h i + wi

Substituting the inventory levels given by (41) into Eq. (40), we get the total inven-
tory cost C F0

  1/n i 
 0  N
ni wi 1 
N
C F0 = C F S F1 , . . . , S F0 N = wi ri TF 1− +A + ci ri
ni + 1 h i + wi TF
i=1 i=1
(42)

and, evidently, the optimal lot sizes can be calculated as

Q 0Fi = ri TF , for i = 1, 2, ..., N . (43)

Let us now consider that the total available storage space in the warehouse is limited
by W . We can proceed analogously to Sect. 4.1. Hence, if the levels S Fi 0 , with i =

1,2, …, N, satisfy the constraint (29), then they will be the optimal inventory levels.
Otherwise, applying arguments similar to those used in Sect. 4.1, we can define the
new function

  1
wi − λvi ni
f F (λ) = vi ri TF − W, (44)
h i + wi
i∈I

123
1950 L. A. San-José et al.

with I = {i : wi − λvi ≥ 0} and we can then deduce that the optimal inventory levels
are given by

  1/n i
wi −λ∗F vi
ri TF if i ∈ I F
S Fi = h i +wi (45)
0 if i ∈
/ IF

 
where λ∗F = arg{ f F (λ) = 0} and I F = i : wi − λ∗F vi ≥ 0 .
We now summarize these results to derive the following algorithm, which can
be used to find the optimal policies when the inventory cycle is a fixed and known
parameter T F .

Algorithm 2 Step 1. For every i = 1, …, N, calculate S Fi 0 by using Eq. (41).

Step 2. If i=1N 0 ≤ W , then S ∗ = S 0 , for i = 1, 2, ..., N . Go to Step 7.

vi S Fi Fi Fi
Else, go to Step 3.
Step 3. Let λ0 = 0.
Step 4. Rearrange the wi /vi values into a sequence of N non-decreasing numbers
and let us designate them by λi , with i = 1,2, …, N. Thus, λi is the i-th smallest value.
Let λk be the first value of the set {λ1 , λ2 , …, λN } such that f F (λk ) ≤ 0, with f F (λ)
given by (44).
Step 5. Obtain λ∗F = arg λk−1 < λ ≤ λk { f (λ) = 0}.
Step 6. Calculate T * by using Eq. (38).
For i=1 to N do  
∗ =r T wi −λ∗F vi 1/n i
If wi /vi ≥ λk then S Fi i F h i +wi .
∗ = 0.
else S Fi
Step 7. The economic lot sizes are Q ∗Fi = ri TF , for i = 1, 2, ..., N ..
The reorder points are calculated by s Fi ∗ = S ∗ − r T , for i = 1, 2, ..., N ..
Fi i F  ∗ 
From (40), calculate the minimum inventory cost C F∗ = C F S F1 , ..., S F∗ N .
Obtain the maximum profit per unit time G ∗F = i=1 N
pi ri − C F∗ .

Next, two particular cases are analyzed.

(i) Let us assume that the demand patterns are uniform, that is, ni = 1, for all i =
N
1,2, …, N. If vi S Fi
0 > W , then the equation f (λ) = 0 is reduced to
F
i=1

  
wi − λvi
vi ri TF =W (46)
h i + wi
i∈I

where I = {i : wi − λvi ≥ 0}. From (46) we have

     
wi vi
vi ri TF −λ vi ri TF =W (47)
h i + wi h i + wi
i∈I i∈I

123
An inventory model for multiple items assuming time-varying… 1951

Therefore, the multiplier is

 
wi
i∈I vi ri TF h i +wi −W
λ∗F =   (48)
vi
i∈I vi ri TF h i +wi

Substituting the above λ∗F in Eq. (45) we have the inventory levels S Fi
∗ = 0 for i ∈
/
I and

∗ wi λ∗ vi
S Fi = ri TF − ri TF F ,i ∈ I (49)
h i + wi h i + wi
∗ in the cost function given in (40), we
Substituting the optimal inventory levels S Fi
obtain the minimum inventory cost
 
 ∗ 2
S Fi 
N
wi ri TF  A 
N
C F∗ = (h i + wi ) + − ∗
wi S Fi + + ci ri
2ri TF 2 TF
iI i=1 iI i=1

If the set I is {1, …, N}, then the inventory policy obtained coincides with the
optimal policy for an inventory system with several items, constant demands, allow-
ing shortages fully backlogged and limited storage (see [12], pages 75–76, and [4],
pages 338–339).
Notice that the solution proposed in Naddor [12] for the inventory model with uni-
form demand pattern, several items and limited storage is generally incorrect, because
he always considers I = {1, …, N}. However, in that case, some of the terms wi −λ∗F vi ,
with λ∗F given by (48), can be negative (please see Sect. 6.3 below) and, therefore, his
procedure is not valid. This is because Naddor did not consider the constraints S i ≥ 0
for all i = 1, 2, …, N.
(ii) Now, a single item is considered in the inventory system, that is, we have
N = 1. We assume that the inventory level of this item is denoted by S, and the
parameters for that item are r, h, w, n and v. From (41), the inventory level is obtained
 1/n
w
by S F0 = r TF h+w . If vS F0 ≤ W , then the optimal level is S F∗ = S F0 . Otherwise,
we have to calculate the multiplier λF . The equation f F (λ) = 0 has its positive solution
on the interval (0, w/v). Therefore, from (44), we obtain
 1/n
w − λv
vr TF −W =0 (50)
h+w

Thus, the multiplier is

 n
w (h + w) W
λ∗F = − (51)
v v vr TF

Now, substituting the above multiplier λ∗F in (45), we obtain the value S F∗ = W/v.
Thus, as the inventory level S F∗ satisfies the constraint (29), then S F∗ = W/v will be the

123
1952 L. A. San-José et al.

optimal inventory level. The economic order quantity is given by Q ∗F = r TF and the
reorder point is calculated by s F∗ = S F∗ − Q ∗F = W/v – rT F .
Substituting the optimal inventory level S F∗ in the cost function (40), we obtain, in
this case, that the minimum inventory cost C F∗ is:

 n 
  (h + w)W W nr TF W 1
C F∗ = C F S F∗ = +w − +A + cr (52)
(n + 1)v vr TF n+1 v TF

In the following section, we present some numerical examples to illustrate the

applicability of the theoretical results obtained for the inventory model proposed in
this article.

6 Numerical results

Let us assume that a company sells N = 6 different products. We analyze the inventory
management of those items. For each of the six items, the average demand r i , the
carrying cost hi per unit time, the shortage cost wi per unit time, the demand pattern
index ni , the purchasing cost ci , the selling price pi , and the volume or unit space vi ,
with i = 1,2, …, 6, are shown in Table 1. The replenishing cost is A = $ 120 per order.
We present below the optimal policies for this inventory system, considering various
storage capacities.

6.1 Multi-item inventory system with power demand patterns, full backlogging,
variable inventory cycle and limited storage capacity

Table 2 shows the optimal inventory policy obtained for different storage space limi-
tations, which have been obtained by applying Algorithm 1 proposed in Sect. 4.1.
Under these optimal inventory policies, the ordering cost is high with respect to
the holding cost and the backlogging cost. Note that, for this system, all the lot sizes
ordered for replenishing stocks of products are different from the initial stock levels of
items. This means that the optimal policy allows shortages, and it should not replenish
stocks until shortage levels of the products decrease to the optimum reorder points,
which are also shown in Table 2.
Furthermore, if W ≥ 221.174, then the optimal inventory policy is given by (13)
and (14). Otherwise, the positive optimal multiplier λ* must be calculated. Next, the
optimal inventory cycle is obtained by (38) and the optimal initial inventory levels are
calculated by (35).
Note that the holding cost decreases, while the shortage cost and the ordering cost
increase as the warehouse capacity W decreases. This is because the inventory cycle,
the optimal inventory levels of the items and the reorder points decrease as warehouse
capacity decreases. As a consequence, the optimal inventory cost increases slightly,
while the maximum profit decreases a little as the parameter W decreases. Thus, when
W is reduced from 90 to 60 m3 (a reduction of 33.33%), the total inventory cost has

123
 Table 1 Input parameters for an inventory system with N = 6 items whose demands follow different power pattern indices

Item Average demand Holding cost per Shortage cost per Demand pattern Purchasing cost Selling price Volume or unit
ri unit time hi unit time wi index ni ci pi storage space
vi

1 300 units/year 2.8 $/unit and time 6.2 $/unit and time 1.6 4 $/unit 7 $/unit 0.5 m3
2 120 units/year 1.5 $/unit and time 4.2 $/unit and time 0.4 7 $/unit 11 $/unit 0.7 m3
3 600 units/year 3.0 $/unit and time 8.0 $/unit and time 2.0 2 $/unit 5 $/unit 0.6 m3
An inventory model for multiple items assuming time-varying…

4 96 units/year 2.4 $/unit and time 3.5 $/unit and time 1.0 8 $/unit 12 $/unit 0.8 m3
5 480 units/year 1.2 $/unit and time 4.0 $/unit and time 0.5 5 $/unit 8 $/unit 0.4 m3
6 1200 units/year 3.6 $/unit and time 5.4 $/unit and time 0.8 3 $/unit 6 $/unit 0.6 m3

123
1953
 Table 2 Optimal policy for the multi− item inventory system with power demands, variable inventory cycle and full backlogging, considering the parameters shown in Table
1954

W k T* Item 1 Item 2 Item 3

123
λk λ*

≥ 221.174 – – – 0.220212 S* 52.3367 12.3157 112.679

Q* 66.0637 26.4255 132.127
s* − 13.7270 − 14.1098 − 19.4488
90 1 4.375 3.72031 0.148498 S* 28.2398 0.739008 64.5180
Q* 44.5493 17.8197 89.0987
s* − 16.3096 − 17.0807 − 24.5807
60 2 6 5.72317 0.136061 S* 21.9618 0.003480 52.5972
Q* 40.8184 16.3274 81.6368
s* − 18.8566 − 16.3239 − 29.0396
40 3 9 7.61622 0.129190 S* 16.9303 0 43.2862
Q* 38.7571 15.5029 77.5143
s* − 21.8269 − 15.5029 − 34.2281
30 3 9 8.82495 0.126331 S* 13.8002 0 37.5881
Q* 37.8992 15.1597 75.7984
s* − 24.0990 − 15.1597 − 38.2104

W Item 4 Item 5 Item 6 Holding cost Shortage cost Ordering cost Total cost Optimal profit

≥ 221.174 S* 12.5409 62.5455 139.544 345.369 199.560 544.929 11,097.86 7514.14

Q* 21.1404 105.702 264.255
s* − 8.59948 − 43.1564 − 124.711
90 S* 1.26551 16.6323 48.3112 89.2876 383.977 808.093 11,289.36 7322.64
L. A. San-José et al.
 Table 2 (continued)

W Item 4 Item 5 Item 6 Holding cost Shortage cost Ordering cost Total cost Optimal profit

Q* 14.2558 71.2790 178.197

s* − 12.9903 − 54.6467 − 129.886
60 S* 0 7.06861 24.3849 43.1207 495.444 881.955 11,428.52 7183.48
Q* 13.0619 65.3095 163.274
s* − 13.0619 − 58.2409 − 138.889
40 S* 0 2.08505 7.88189 20.1042 604.108 928.861 11,561.07 7050.93
Q* 12.4023 62.0114 155.029
s* − 12.4023 − 59.9264 − 147.147
30 S* 0 0.495423 0.581472 12.2445 672.895 949.888 11,643.03 6968.97
Q* 12.1277 60.6387 151.597
s* − 12.1277 − 60.1433 − 151.015
An inventory model for multiple items assuming time-varying…

123
1955
1956 L. A. San-José et al.

increased a little more than 1.23 percent and the profit per unit time has decreased a
little more than 1.90 percent.

6.2 Multi-item inventory system with power demand patterns, fixed inventory
cycle, full backlogging and limited storage capacity

For reasons of strategic planning, the company sets when the products must be
replenished. Thus, the scheduling period is fixed and known. Suppose the items
are replenished every month, that is, the scheduling period is T F = 1/12 =
0.0833333 years.
To obtain the optimal inventory policies, we apply Algorithm 2 proposed in Sect. 5.
The optimal initial inventory levels, the economic order quantities, the inventory costs
and the maximum profit per unit time are shown in Table 3.
If we compare this table with Table 2, it can be seen that the backlogging cost
and the maximum profit decrease, while the ordering cost and the total inventory cost
increase.

6.3 Multi-item system with uniform demands, fixed inventory cycle and storage
capacity limited to W = 30 cubic meters

Now, let us consider the same input parameters given in Table 1, but changing the
power demand indices to ni = 1, for all i = 1,2, …, N and supposing, as in Sect. 6.2,
that the items are replenished every month, that is, the scheduling period is T F = 1/12.
In addition, we suppose that the storage capacity is W = 30 cubic meters.
Applying Algorithm 2 proposed in Sect. 5, we have k = 3 and λ* = 6.44535. The
optimal inventory levels, inventory costs and maximum profit per unit time of this new
inventory policy are shown in Table 4.
Remark 2 If the Naddor approach is used when demands are uniform and the ware-
house capacity is W = 30 cubic meters, then the value of the Lagrangian multiplier
λ* would be.
 N   
 wi − λvi
∗
λ = arg vi ri TF =W = 6.21072
0<λ h i + wi
i=1

and the optimal inventory levels would be obtained from

 
wi − λ∗ vi
Si = ri TF , for i ∈ I = {1, 2, . . . , N }
h i + wi

Thus, the inventory levels would be S 1 = 8.59623, S 2 =− 0.258775, S 3 = 19.4253,

S 4 =− 1.99129, S 5 = 11.6593 and S 6 = 18.5962. Unfortunately, as can be seen, the
optimal solution proposed by Naddor would not be feasible (because S 2 < 0 and S 4
N
< 0). In addition, i=1 vi max(Si , 0) = 31.7742 > W = 30. Therefore, this solution
does not satisfy the storage capacity.

123
An inventory model for multiple items assuming time-varying… 1957

Table 3 Optimal policy for the multi-item inventory system with power demands, fixed inventory cycle T F
= 1/12 and full backlogging, assuming the parameters shown in Table 1

W k λk λ* Item 1 Item 2 Item 3 Item 4

λ*

≥ 83.6972 – – – S* 19.8054 4.66054 42.6401 4.74576

QF 25 10 50 8
s* − 5.19462 − 5.33946 − 7.35986 − 3.25424
60 1 4.375 2.56549 S* 17.1342 1.15537 38.3190 1.96286
QF 25 10 50 8
s* − 7.86575 − 8.84463 − 11.6810 − 6.03714
40 2 6 5.20284 S* 14.0968 0.0299858 33.2972 0
QF 25 10 50 8
s* − 10.9032 − 9.97001 − 16.7028 −8
30 3 9 6.86099 S* 11.9685 0 29.7085 0
QF 25 10 50 8
s* − 13.0315 − 10 − 20.2915 −8

W Item 5 Item 6 Holding Shortage Ordering Total cost Optimal

cost cost cost profit

≥ 83.6972 S* 23.6686 52.8067 130.695 75.5180 1440.00 11,654.21 6957.79

QF 40 100
s* − 16.3314 − 47.1933
60 S* 13.0821 34.7160 69.4570 166.354 1440.00 11,683.81 6928.19
QF 40 100
s* − 26.9179 − 65.2840
40 S* 5.44679 17.9560 31.5387 280.555 1440.00 11,760.09 6851.91
QF 40 100
s* − 34.5532 − 82.0440
30 S* 2.33217 8.76300 17.4042 354.865 1440.00 11,820.27 6791.73
QF 40 100
s* − 37.6678 − 91.2370

7 Conclusions

The main contribution of this paper is the determination of the optimal inventory pol-
icy for multi-item inventory systems with backlogged shortages and power demand
patterns. First, the inventory model considers that the place where the items are held
in stock has enough capacity to store all the items. Then, the inventory model assumes
that the total storage space available in the warehouse is limited. From the point of
view of decision-making, incorporating power demand patterns may help to better fit
the evolution of the inventory levels of the products. The results obtained have a direct
impact on the inventory policy to follow, reducing the costs of inventory manage-
ment. Considering multiple items and incorporating backlogging into the inventory

123
 1958

123
Table 4 Optimal policy for the multi-item inventory system with uniform demands, fixed inventory cycle, full backlogging and a limited storage capacity of W = 30 m3

Item 1 Item 2 Item 3 Item 4 Item 5 Item 6 Holding cost Shortage cost Total cost Optimal profit

S* 8.27035 0 18.7854 0 10.9374 17.0310 21.4325 375.749 11,845.18 6766.82

QF 25 10 50 8 40 100
s* − 16.7296 − 10 − 31.2146 −8 − 29.0626 − 82.9690
L. A. San-José et al.
An inventory model for multiple items assuming time-varying… 1959

models are more realistic assumptions and this adds new contributions to other papers
previously analyzed.
An inventory model has been formulated in order to take decisions to maximize the
profit per unit time. In this inventory model, demands of the items are not constant. They
depend on time and follow power patterns, representing the temporal concentration of
customer demand throughout the scheduling period for each item.
Solving the multi-item inventory problem, we can calculate the inventory cycle,
the initial inventory levels, the economic order quantities and the reorder points that
minimize the inventory management cost of all the products. Thus, we first determine
the optimal inventory policy for an inventory system with full backlogging without
considering the capacity of the warehouse, achieving the optimal scheduling period
and the optimal stock levels. The solution depends on the input parameters and the
power demand pattern index of each item, i.e., the optimal policy is conditioned by
the behavior of customer demand for each product.
Next, we analyze the model for the multi-item inventory system with power demand
patterns and full backlogging when the warehouse used in the storage of the items has
a fixed capacity. The optimal initial inventory levels, the economic order quantities,
the minimum inventory cost and the maximum profit per unit time are obtained.
The model presented in this paper extends some inventory systems studied by
other authors. Thus, the multi-item model of inventory level with constant demands,
backlogged shortages and limited storage is a particular case of the model analyzed
in this work (see [12]). The optimal solution proposed in this paper also generalizes
the optimal policy for the inventory system with a single item, constant demand and
full backlogging (see [4]). Moreover, the optimal policy extends the inventory policy
proposed by Sicilia et al. [21] for the inventory system with a single item, power
demand pattern and full backlogging.
Future research would be to study the inventory system for multiple items with
power demand patterns, additionally considering a deterioration rate for items. Another
research line may be to analyze the inventory system for multiple items and power
demand patterns, assuming that shortages are lost sales. Finally, it would be interest-
ing to develop the optimal policy for the inventory system with multiple items and
power demand patterns, supposing that the replenishments of the products are not
instantaneous and there exists a production rate for each item in the inventory model.

Acknowledgements This work is partially supported by the Spanish Ministry of Science, Innovation and
Universities through the Research Project MTM2017-84150-P, which is co-financed by the European Com-
munity under the European Regional Development Fund (ERDF).

Funding Open Access funding provided thanks to the CRUE-CSIC agreement with Springer Nature.

Open Access This article is licensed under a Creative Commons Attribution 4.0 International License,
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as you give appropriate credit to the original author(s) and the source, provide a link to the Creative
Commons licence, and indicate if changes were made. The images or other third party material in this
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to the material. If material is not included in the article’s Creative Commons licence and your intended use
is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission

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directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/
by/4.0/.

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