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Discrete Dynamics in Nature and Society
Volume 2014 (2014), Article ID 476085, 10 pages
http://dx.doi.org/10.1155/2014/476085
Research Article

An EPQ Inventory Model with Allowable Shortages for Deteriorating Items under Trade Credit Policy

1Department of Mechanical and Manufacturing Engineering, Universiti Putra Malaysia, Selangor 43300, Malaysia
2Department of Computer Engineering, Science and Research Branch, Islamic Azad University, Tehran 1477893855, Iran

Received 2 December 2013; Revised 14 January 2014; Accepted 14 January 2014; Published 24 February 2014

Academic Editor: Juan J. Nieto

Copyright © 2014 Zohreh Molamohamadi et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper attempts to obtain the replenishment policy of a manufacturer under EPQ inventory model with backorder. It is assumed here that the manufacturer delays paying for the received goods from the supplier and the items start deteriorating as soon as they are being produced. Based on these assumptions, the manufacturer’s inventory model is formulated, and cuckoo search algorithm is applied then to find the replenishment time, order quantity, and selling price with the objective of maximizing the manufacturer’s total net profit. Besides, the traditional inventory system is shown as a special case of the proposed model in this paper, and numerical examples are given to demonstrate better performance of trade credit. These examples are also used to compare the results of cuckoo search algorithm with genetic algorithm and investigate the effects of the model parameters on its variables and net profit.