This paper deals with a two-level inventory system consisting of a central warehouse and an arbitrary number of non-identical retailers with (1, T) ordering policy. It is assumed that the fixed ordering cost at retailers is negligible; however, it has a positive value at central warehouse. Perishable items with fixed shelf life are considered for which the aging begins immediately on their arrival at central warehouse. Although the demand of retailers is random and follows Poisson distribution, demand of the central warehouse could be determined deterministically due to the (1, T) ordering policy of retailers. Therefore, the central warehouse employs a periodic policy with a fixed time period. In this study, the approximated total cost function of the inventory system is derived. Then due to the complexity of the cost function, a metaheuristic algorithm named Differential Evolutionary algorithm, is utilized to find the optimal or near-optimal solutions. Finally, a numerical experiment is carried out to demonstrate the accuracy of the model, which shows that the used approximation works rather well.

Keywords: Inventory Control, (1, T) Policy, Two-Level System, Perishable Item.

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