Two commodity inventory system with variable ordering quantity

We investigate a two-commodity inventory system, where the maximum storage capacity of i-th commodity is Si (i=1, 2). We assume that the demand for i-th commodity is of unit size and the demand time points form independent Poisson process. The record level is fixed as si, (i=1, 2) for the i-th commodity and the order policy is to place for Si −Li items when the inventory level of both commodities are less than or equal to si where Li is the inventory level of i-th (i=1, 2) commodity at that time. The joint probability distribution for both commodities is obtained in the steady state with exponential lead time. Various system performance measures are derived and long run expected cost rate is calculated. The results are illustrated numerically.