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