Two-warehouse inventory model for deteriorating items with demand influenced by innovation criterion in growing technology market

One of the major concerns for the technology market is the demand volatility andits impact on inventory policies. Demand volatility in the technology sector mayarise due to many factors namely customer choices, competition, growingmarket size, and so on. Often companies use rented warehouses to absorb anyfluctuations in demand. Unfortunately, warehouse and inventory researchesignore the phenomenon of growing market size to formulate policy decisions. Inthis paper, we proposed a two-warehouse inventory model with deterioration fortechnology products with linearly increasing market size where demand followsinnovation diffusion criterion. The model is based on the assumption that theholding costs in the rented warehouse are more than the own warehouse. Asimple solution procedure also discussed to solve nonlinear cost function.Numerical example and sensitivity analysis are also used to describe the utilityof the model.