The %1 100 screening Economic Order Quantity model under shortage and delay in payment

Abstract

It’s for a long time that the Economic Order Quantity(EOQ) model has been successfully applied to inventory management. This paper studies a multiproduct EOQ problem in which the defective items will be screened out by %100 screening process and will be sold after the screening period. Delay in payment is permissible though payment should be made during the grace period and the warehouse capacity is limited. Otherwise, there will be an additional penalty cost for late payment so the retailer would not be able tobuy products at discount prices.All-units and incremental discounts are considered for the products which dependon the order’s quantity just like the permissible delay in payment. Genetic algorithm (GA) and particle swarm optimization (PSO) algorithm are used to solve the proposed model and numerical examples are provided for better illustrations.