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Background: In this paper we developed a fuzzy two-warehouse (one is OW, the own warehouse and other is RW, the rented warehouse) inventory model of deteriorating items with price dependent demand rate and allowed shortages under partially backlogged conditions. Since the capacity of any warehouse is limited, the supplier has to rent a warehouse for keeping the excess units over the fixed capacity W of the own warehouse in practice. The rented warehouse owed higher holding cost than the own warehouse. In this paper we considered holding cost, deterioration rate, shortages cost and lost sales as triangular fuzzy numbers. Methods: Graded Mean Integration Representation is used to defuzzify the total cost function. The result obtained by this method is compared with crisp model with the help of a numerical example. Sensitivity analysis is accomplished to changing one parameter at a time and keeping others at their archetypal. Results and conclusions: It has been proved that graded mean integration representation method gives more accurate result as compare to crisp model.

Two-storage inventory model for deteriorating items with price dependent demand and shortages under partial backlogged in fuzzy approach