Optimal inventory control of lumpy demand items using genetic algorithms

Abstract

This paper is concerned with the optimal control of inventory items which experience lumpy demands. A mathematical model is developed for the determination of optimal replenishment policies for such items. In order to avoid disrupting the inventory system, a maximum issue quantity of w units is specified such that customer orders with sizes exceeding w units will be filtered out of the inventory system and treated as special orders to be satisfied by placing special replenishment orders to a supplier. Customer orders with sizes less than or equal to w units will be met from stock. A genetic search algorithm is developed to solve the problem. The theoretical results obtained are illustrated with a numerical example.