Using multi-objective electromagnetism-like optimization to analyze inventory tradeoffs under probabilistic demand

Abstract

This paper studies a bi-objective inventory model that intends to simultaneously determine order size and safety factor without estimating shortage cost or implicitly conducting monetary evaluation of customer service. A solution algorithm based on electromagnetism-like mechanism is employed to analyze tradeoff between expected total relevant cost and expected number of stockout occasion under probabilistic demand. Inventory decisions generated from MOEMO (multi-objective electromagnetism-like optimization) are not easily dominated by traditional methods, but also MOEMO tradeoff spread much wider than those of sequential and simultaneous methods.