An Algorithm for Joint Multi-item Replenishment Problem under Trade Credits

Abstract

This study deals with the joint multi-item replenishment problem under trade credit. All existing studies about trade credit focused on single-item replenishment policy. However, joint multi-item replenishment has been widely applied in many industries to take advantage of trans port economies of scale. In this paper we extend the traditional inventory model by considering trade credit t and multi-item replenishment so as to better reflect the real-world business situation. The objective is to determine the optimal replenishment schedule for each item while minimizing the total cost. Two heuristics, Cost-balancing heuristic and Extreme finding heuristic, are developed to solve the problem. From computational analysis, we illustrate and compare the two heuristics. Our performance study shows that Extreme-finding heuristic is better than Cost-balancing heuristic.