A constrained multi-products EPQ inventory model with discrete delivery order and lot size

Abstract

This paper proposes an alternative heuristic algorithm for a multi-product Economic Production Quantity (EPQ) vendor–buyer integrated model with Just in Time (JIT) philosophy and a budget constraint. This type of problem is usually solved by a Mixed Integer Non Linear Problem (MINLP), which is complex and computationally expensive. The proposed heuristic algorithm involves less computation and therefore it is less expensive than the previously published algorithms. Furthermore, the heuristic algorithm is simpler as it derives the integer values for all discrete variables in a straightforward manner. Through empirical experimentation, it is demonstrated that the heuristic algorithm provides solutions closer to the lower bound in a very short time.