Finally, the fifth acceptance of 2012 comes.

A production-inventory model incorporating the effect of preservation technology investment when demand is fluctuating with time

submitted to 

Journal of Computational and Applied Mathematics

Tsu-Pang Hsieh and Chung-Yuan Dye

Abstract

In most of the inventory models in the literature, the deterioration rate of goods is viewed as an exogenous variable, which is not subject to control. In the real market, the firms can reduce the deterioration rate of product by making effective capital investment in preservation technology. In this research, we formulate a production-inventory model for deteriorating items with time-varying demand and finite replenishment rate by allowing preservation technology cost as a decision variable in conjunction with production policy. The objective is to find the optimal production and preservation technology investment strategies while minimizing the total cost over the planning horizon. A traditional particle swarm optimization is coded and used to solve the mixed-integer nonlinear programming problem. Some numerical examples are used to illustrate the features of the proposed model.

Key words: inventory, time-varying demand, deterioration, preservation technology investment, particle swarm optimization

Tags: 3Q, Teaching

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