Notation | Description |
| Unit price of goods sold by Location and respectively |
| Procurement cost paid by Location and |
| Average inventory carrying/holding cost |
| Salvage value for each unit of unsold stock |
| Penalty cost for each unit of unmet demand |
| Cost incurred in transshipping a unit from Location and and vice versa |
| Transshipment price charged by to and by to |
| Optimal inventory levels for and respectively |
| Quantity of transshipments from to and from to |
| Actual sales in unit by and |
| Amount of unsold stock at and respectively |
| Amount of unmet demand of and |
| Level of demand at locations and respectively |