Optimal Inventory Control of Obsolete Products with Permissible Delay in Payments and Time-dependent Demand using PSO Algorithm

Subject Areas : Supply Chain Management

Hasan Zamanibajgani ¹ , Mohamadreza Gholamian ²

1 - دانشکده مهندسی صنایعدانشگاه علم و صنعت ایران
2 - دانشکده مهندسی صنایعدانشگاه علم و صنعت

Received: 2023-02-28 Accepted : 2023-11-14 Published : 2023-06-01

Keywords: Inventory control, Particle Swarm Optimization (PSO), Time-dependent demand, Obsolete Items, Delay in Payment,

Abstract :

This study provides an inventory control model for determining the optimal replenishment cycle of obsolete items, in which the customer demand is regarded as a decreasing function of time in sudden obsolescence. Further, to encourage the buyer for more purchasing, the seller can allow the buyer to pay the cost with a delay. Accordingly, the present paper focuses on investigating an inventory control model for obsolete items while considering a trade credit policy with time-dependent demand and sudden obsolescence. Given the nonlinearity of the proposed model, the Taylor series approximation was used to solve it. In addition, to avoiding the effect of Taylor series approximation on the optimal solution, an efficient particle swarm optimization meta-heuristic algorithm was applied to find the near-optimal solution, indicating better answers. Numerical examples in the case study of mobile phone wholesale industry, were considered and solved to demonstrate the validation of the proposed model. Finally, a sensitivity analysis was performed on the effects of the main parameters on the total profit and replenishment cycle time. The numerical results indicated that the inclusion of obsolescence risk in the inventory model with obsolete items has a significant effect on increasing profits while reducing the costs of these items.