In this paper, we apply continuous review (S-1, S) policy for inventory control in a three-echelon supply chain (SC)\r\nincluding r identical retailers, a central warehouse with limited storage space, and two independent manufacturing\r\nplants which offer two kinds of product to the customer. The warehouse of the model follows (M/M/1) queue\r\nmodel where customer demands follow a Poisson probability distribution function, and customer serving time is\r\nexponential random variable. To evaluate the effect of considering bi-product developed model, solution of the\r\ndeveloped model is compared with that of the two (M/M/1) queue models which are separately developed for\r\neach product. Moreover, and in order to cope with the computational complexity of the developed model, a\r\nparticle swarm optimization algorithm is adopted. Through the conducted numerical experiments, it is shown that\r\ntotal profit of the SC is significantly enhanced using the developed model.
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