Optimisation of a multi-item inventory model for deteriorating items with budget constraint, time-dependent holding costs, and two-level quantity discount: a comparison

Mahdi Karimi and Seyed Jafar Sadjadi

European Journal of Industrial Engineering, 2025, vol. 19, issue 4, 454-501

Abstract: Considering the increasing number of perishable goods, it is necessary to study the inventory control of these items. Previously, due to the difficulty of the models and the need for solution methods, many fundamental assumptions were ignored. This article presents a multi-item economic order quantity model for deteriorating items. This paper's novelties are using dynamic programming, adding both budget and capacity constraints, and some realistic assumptions to the model. This study allows shortages with partial backlogging, and a two-level discount is available. Also, we investigated the unspent budget elsewhere to increase the total income. The greedy search and metaheuristic methods were used to compare the results with the primary method. The results show that the proposed dynamic programming can solve the problem and surpass metaheuristic methods in precision and running time (for small cases). A sensitivity analysis was conducted and resulted in some managerial and theoretical insights. [Submitted: 19 June 2023; Accepted: 19 January 2024]

Keywords: inventory control; economic order quantity; deteriorating items; budget constraint; capacity constraint; dynamic programming. (search for similar items in EconPapers)
Date: 2025
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