Supply chain network design for deteriorating items with discount on transportation cost


Department of Industrial Engineering, Amirkabir University of Technology, 424 Hafez Avenue, 1591634311, Tehran, Iran


Distribution of deteriorating items is different from other items. This issue leads distributors to transport with lower volumes. On the other hand, one of the mechanisms that attract buyers to purchase items is discount; but a larger amount of order has a lower price for one item but has a higher risk of deterioration. Despite the importance of issue, previous researches on deteriorating items did not consider discount conditions in designing supply chain network. Hence, in this paper, balancing between the cost of ordering and the cost of deterioration with consideration of discount through a new model is studied. The problem is solved for numerical examples with an improved meta-heuristic composed of simulated annealing (SA) and genetic algorithm (GA) and results are reported.  Furthermore, a heuristic method for small scale problems is represented and compared with the introduced algorithm to analyze the performance of method. Finally, results show a significant difference between the costs of the models (with discount and without it).