A two-warehouse EOQ model with interval-valued inventory cost and advance payment for deteriorating item under particle swarm optimization

Abstract

Generally, most of the inventory costs are not always fixed due to uncertainty of competitive market. In the existing literature, it is found that several researchers have worked on uncertainty considering inventory parameters as fuzzy valued. In this work, we have represented the inventory parameters as interval. Using this concept, we have developed a two-warehouse inventory model with advanced payment, partial backlogged shortages. Due to uncertainty, this problem cannot be solved by existing direct/indirect optimization technique. For this purpose, different variants of particle swarm optimization techniques (viz. PSO-CO, WQPSO and GQPSO) have been developed to solve the problem of the proposed inventory model by using interval arithmetic and interval order relations. Finally, to illustrate and also to validate the proposed model, a numerical example has been solved and the best found solutions (which is either optimal solution or near optimal solution) obtained from different variants of PSO have been compared. Then, a sensitivity analysis has been performed to study the effect of changes of different parameters of the model on the optimal policy.