Inventory Policy with Stock, Price and Credit-Linked Demand

Abstract

An inventory control problem under two-level trade-credit policy with fuzzy inventory costs is proposed where supplier provides not only a credit-period for settling account but also a cash discount to the retailers. Due to this advantage the retailer also offers a fixed credit period to all its customers to boost the demand. Demand also depends on stock and selling price. A Genetic Algorithm (GA) with chromosome’s life-time dependent varying population size is used to solve the model where, at the time of generation of initial population, diversity in the population is maintained using information entropy theory. In the algorithm crossover probability of a pair of parents is a function of their age-type (young, middle-aged, old, etc.) and is obtained using a fuzzy rule base and possibility theory. A fuzzy possibility/necessity based evolution process is proposed to deal with fuzzy objective function.