Optimization of profit and customer satisfaction in combinatorial production and purchase model by genetic algorithm

Document Type: Research Paper

Authors

1 Department of Industrial Engineering, Gopayegan University of Technology. Golpayegan, Iran

2 Department of Industrial Engineering, Gopayegan University of Technology, Golpayegan, Iran.

Abstract

Optimization of inventory costs is the most important goal in industries. But in many models, the constraints are considered simple and relaxed. Some actual constraints are to consider the combinatorial production and purchase models in multi-products environment. The purpose of this article is to improve the efficiency of inventory management and find the economic order quantity and economic production quantity that can minimize the cost of inventory and customer satisfaction. In this study, the models with these targets in combinatorial production and purchase systems with the assumption the warehouse and budget constraints are proposed. Since a long time for solving the problem with an exact method is required, we develop a genetic algorithm. To evaluate the efficiency of the proposed algorithm, test problems with different sizes of the problem in the range from 1 to 2000 jobs, are generated. The results show that the genetic method is efficient to determine economic order quantity and economic production quantities. The computational results demonstrate that the average error of the solution is 10.93\%. 

Keywords