Improving Inventory Control for SABIC Products

The Saudi Basic Industries Corporation (SABIC) is one of the world's leading manufacturers of fertilizers, plastics, chemicals and metals. It supplies these products to many countries over all the world. As a result, SABIC needs to store its products for certain periods of time while these products are waiting to be delivered to clients in Saudi Arabia or to be exported abroad. Because of the great need to improve inventory control for SABIC products, the present research was carried out. The problem we consider for such giant systems is considered within a given time horizon which consists of different time periods. Production, demand, and deterioration rates in each period and for each product are known. Shortage for each product is allowed but it is completely backlogged. The objective is to find the optimal production and restarting times for each product in each period so that the overall total inventory cost for all products is minimized. In this paper, a formulation of the problem is developed and optimization techniques are performed to show uniqueness and global optimality of the solution.