Determination Optimum Inventory Level for Material Using Genetic Algorithm

Abstract

The integration of decision-making will lead to the robust of its decisions, and then determination optimum inventory level to the required materials to produce and reduce the total cost by the cooperation of purchasing department with inventory department and also with other company,s departments. Two models are suggested to determine Optimum Inventory Level (OIL), the first model (OIL-model 1) assumed that the inventory level for materials quantities equal to the required materials, while the second model (OIL-model 2) assumed that the inventory level for materials quantities more than the required materials for the next period. This study was applied in Wasit Company for Textile Manufacturing in the Textile Factory, where it produces five products, which are printed striped, plain, poplin, dyed poplin and Naba weave. The products are made from cotton and they are passing through several stages to transfer to the final product. A genetic algorithm is used to determine the optimum quantity of the purchase a cotton and colors for each month and with minimum cost. Where the purchasing and transportation costs were either constant or variable with respect to purchased quantities while holding cost is kept constant. The results showed that the total cost of the first model is minimum than the second model because the holding cost for this model is less from the second model, while the purchasing and transportation costs from two models are equals. The percentage of purchasing cost for cotton is the biggest value, more 99% of purchasing cost for two models.