In this paper, a single item deterministic inventory model with two separate warehouses called
owned warehouse/show-room (OW) and rented warehouse (RW) is developed. The proposed
model of this paper also considers a realistic assumption regarding the storage capacity of the
rented warehouse. Demand is a function of selling price, advertisement of an item and
displayed inventory level in OW. The stocks of RW are shipped to OW under bulk release
pattern where shortages are not allowed. We discuss different scenarios of the proposed model
to address relative size of stock dependency parameters and the capacity of owned warehouse.
For each scenario, the corresponding problem is formulated as a constrained mixed integer
nonlinear programming problem with three integer and two non-integer variables and a real
coded genetic algorithm (RCGA) is developed to solve the resulted problem. The proposed
model of the paper is also examined using some numerical examples and sensitivity analysis is
performed.