An integrated production-inventory model with fluctuating demand and controllable deterioration rate

In this article, we consider single-manufacturer-single buyer supply chain problem in which the manufacturer procures raw material from outside supplier and distributes the preset amount of produced finished goods to the buyer at a fixed-time interval in multiple deliveries. An integrated model for deteriorating items having fluctuating demand has been proposed with the concept of preservation technology on buyer's side. Volume flexibility is implemented to deal with demand variations. Our aim is to determine the optimal manufacturer's production batch, the replenishment lot sizes, preservation technology investment strategy and total integrated cost. Since the performance of conventional methods is even more of a subject for problems that consist of continuous variables, therefore a genetic algorithm has been implemented to solve the non-linear mix integer programming problem. Numerical example and sensitivity analysis are performed to illustrate the features of proposed joint replenishment model (JRM).