Hybrid NSGA-II Algorithm on Multi-objective Inventory Management Problem

Inventory management is a key issue in supply chain management. Under the circumstances that there are plenty of risks, it is more usable and appropriate if the risk problem is also taken into consideration when addressing the issue of inventory management. In this paper, we firstly introduces the classifications of inventory model, introduces two parameters, VaR and CVaR to measure risks. Also, we established a bi-objective model considering inventory cost and CVaR at the same time. Heuristic method to solve the problem is addressed then. We examined the application of Genetic Algorithm on multi-objective problems, i.e. the NSGA-II algorithm. We proposed an analytic method to simplify the solution of the problem. Besides, we examined the local search method based on the problem and proposed a Hybrid Genetic Algorithm. Simulation verifies the usability of our model and the efficiency of our algorithm.