Optimization of Setup Frequency for TOC Supply Chain Replenishment Systems Based on Pareto Particle Swarm Optimization

Abstract

The theory of constraints (TOC) supply chain replenishment system (TOC-SCRS) is an effective solution for coping with conflicts during the management of supply chain inventories. When it is deployed in a plant or a central warehouse with capacity constraints, TOC-SCRS encounters a problem comprised of 2 parts: first, how to establish a sound setup frequency (SF) that can meet production needs and prevent losses from stock-outs, meaning a SF that allows the plant to make full use of its existing capacity to achieve maximal effective output. Second, it must determine how to establish a sound SF that can help the plant minimize its inventory and cut costs to the greatest possible extent. To resolve the problem, a SF optimization model for TOC-SCRS with capacity constraints is constructed and is then used in combination with Pareto particle swarm optimization (PSO) to obtain SF optimization schemes in this paper. An illustrative example is conducted to verify the feasibility and effectiveness of the proposed approach.