Optimizing multi-item multi-period inventory control system with discounted cash flow and inflation: Two calibrated meta-heuristic algorithms

Abstract: A mixed binary integer mathematical programming model is developed in this paper for ordering items in multi-item multi-period inventory control systems, in which unit and incremental quantity discounts as well as interest and inflation factors are considered. Although the demand rates are assumed deterministic, they may vary in different periods. The situation considered for the problem at hand is similar to a seasonal inventory control model in which orders and sales happen in a given season. To make the model more realistic, three types of constraints including storage space, budget, and order quantity are simultaneously considered. The goal is to find optimal order quantities of the products so that the net present value of total system cost over a finite planning horizon is minimized. Since the model is NP-hard, a genetic algorithm (GA) is presented to solve the proposed mathematical problem. Further, since no benchmarks can be found in the literature to assess the performance of the proposed algorithm, a branch and bound and a simulated annealing (SA) algorithm are employed to solve the problem as well. In addition, to make the algorithms more effective, the Taguchi method is utilized to tune different parameters of GA and SA algorithms. At the end, some numerical examples are generated to analyze and to statistically and graphically compare the performances of the proposed solving algorithms. [Copyright &y& Elsevier]