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This paper investigates an m-product inventory system (m 2: 3) with a capacity constraint where products can have individual order intervals and orders be phased to reduce the maximum stock level of all the products on hand. The objective is then to find the optimal order quantity of each product by considering staggering time and order interval which minimizes the system cost per unit time. The problem is described in a non-linear integer programming problem which shows a very complicated nature to derive the solution analytically. Therefore, a heuristic algorithm is proposed and tested for its efficiency with various numerical examples as being superior to either the Lagrangian multiplier method or the fixed cycle method.

A HEURISTIC ALGORITHM FOR THE DETERMINISTIC MULTI-PRODUCT INVENTORY SYSTEM WITH CAPACITY CONSTRAINT