A MULTI-PERIOD INVENTORY MODEL FOR DETERIORATING ITEMS IN UNCERTAIN ENVIRONMENT

Abstract

A model is constructed for a type of multi-period inventory problem with deteriorating items, in which demands are assumed to be uncertain variables. The objective is to minimize the expected total cost including the ordering cost, inventory holding cost and deteriorating cost under constraints that demands should be satisfied with some service level in each period. To solve the model, two methods are proposed in different cases. When uncertain variables are linear, a crisp equivalent form of the model is provided. For the general cases, a hybrid algorithm integrating the 99-method and genetic algorithm is designed. Two examples are given to illustrate the effectiveness of the model and solving methods.