Title: Particle swarm optimisation with a constraint-handling technique for seller–buyer inventory games

Authors: Ching-Shih Tsou, Shih-Chia Chang, Chin-Hsiung Hsu

Addresses: Department of Business Administration, National Taipei College of Business, Taipei 10051, Taiwan. ' Department of Business Administration, National Taipei College of Business, Taipei 10051, Taiwan. ' Department of Business Mathematics, Soochow University, Taipei 10048, Taiwan

Abstract: Most inventory games are analytics-oriented and lack of a solution procedure such that its application may be retarded. In this paper particle Swarm Optimisation (PSO) is modified to solve a seller–buyer inventory game. A constraint-handling mechanism based on the symbiosis phenomenon in biology makes PSO capable to better explore the constrained search space and, finally, to find the equilibrium that characterises pricing and lot sizing for a seller and a buyer, respectively. Our effort attempts to highlight a workable approach for intractable inventory games that exact methods are impossible to apply.

Keywords: particle swarm optimisation; PSO; game theory; constraints handling; symbiosis mechanism; seller–buyer inventory games; symbiosis; pricing; lot sizing.

DOI: 10.1504/IJBSR.2008.020065

International Journal of Business and Systems Research, 2008 Vol.2 No.2, pp.214 - 225

Published online: 23 Aug 2008 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article