Particle Swarm Optimization Model for Dynamic Supply Chain Inventory Optimization involving Lead Time

Efficient and effective management of inventory throughout the supply chain significantly improves the ultimate service provided to the customer. Efficient inventory management is a complex process which entails the management of the inventory in the entire supply chain and getting the final solution as optimal leading to minimum total supply chain cost. The dynamic nature of the excess stock level and shortage level over all the periods is a serious issue when implementation is considered. In addition, the complexity of the problem increases when more number of distribution centers and agents are involved. Moreover, the supply chain cost increases because of the influence of lead times for supplying the stocks . A better optimization methodology would consider all these factors in the prediction of the optimal stock levels to be maintained in order to minimize the total supply chain cost. In this paper, an optimization methodology is proposed that utilizes the Particle Swarm Optimization algorithm, one of the best optimization algorithms to overcome the impasse in maintaining the optimal stock levels in each member of the supply chain.