Integrated production-inventory model for multi-item raw materials with exponential quality degradation: a real case study

Inventory issues involving quality degradation are complex to resolve and harm company performance. This study proposes an integrated production-inventory model for multi-item raw materials with exponential quality degradation. The proposed model is based on a finished product that requires several materials that degrade quality in the food industry. The proposed model’s objective function is to maximize profits using the decision variables and an optimal number of raw material shipments ( \({m}_{j}\) $m_j$ ), production time cycle ( \(T\) $T$ ), and the number of finished product shipments ( \(n\) $n$ ). The grey wolf optimizer (GWO) algorithm is proposed in this study to solve this problem. A case study was conducted on the Indonesian food industry, which produces a finished product from five raw materials. The results demonstrated that the proposed GWO algorithm could solve the production-inventory model problem. A sensitivity analysis of the research is also presented to investigate the impact of changes in the variable rate of quality degradation ( \(k\) $k$ ), rate of production ( \(P\) $P$ ), and demand ( \(D\) $D$ ).