Using AI approach to solve a supplier-buyer deteriorating inventory model under price decrease

This study drives a two-echelon deteriorating inventory model where buyer is a price-leader. The rate of deterioration is assumed constant and demand increases with price decrease. We consider a varying rate of deterioration with a Weibull distribution and apply the compensation policy. The objective of the study is to maximize total supplier´s profit. A genetic algorithm (GA) is developed to obtain the optimal lifecycle time. Numerical examples are given to validate the analysis of the models.