A computational approach to economic production quantity model for perishable products with backordering shortage and stock-dependent demand

Document Type: Article


1 Department of Industrial Engineering, Faculty of Engineering, University of Kashan, Kashan, Iran

2 Iranian Research Institute for Information Science and Technology (IRANDOC), Tehran, Iran

3 Department of Industrial Engineering, Faculty of Engineering and Technology, University of Qom, Qom, Iran


This paper deals with an Economic Production Quantity (EPQ) model to determine production-inventory policies for perishable products. Shortage is permitted and fully backordered. The demand rate is stochastic- and stock-dependent. Since the problem is mathematically challenging and intractable via analytical approaches, this paper designs a simulation-based optimization algorithm by combining a grid search and a simulation model to solve the problem. The grid search plays the role of optimizer to determine the model variables, and the simulation model is utilized to evaluate the quality of solutions obtained by the optimizer through an iterative procedure. Eventually, a numerical example is discussed to illustrate how the solution procedure works, and a comparison study is carried out to demonstrate the superiority of suggested approach.
Moreover, a comprehensive sensitivity analysis with respect to the problem parameters is performed.


Main Subjects