Open AccessOptimal policies for inventory model with shortages, time-varying holding and ordering costs in trapezoidal fuzzy environment
Author(s) -
Pradeep Kumar
Publication year - 2021
Publication title -
independent journal of management and production
Language(s) - English
Resource type - Journals
ISSN - 2236-269X
DOI - 10.14807/ijmp.v12i2.1212
Subject(s) - holding cost , economic shortage , fuzzy logic , economic order quantity , defuzzification , convexity , mathematical optimization , inventory cost , total cost , fuzzy number , signed distance function , computer science , average cost , operations research , order (exchange) , mathematics , fuzzy set , economics , algorithm , supply chain , artificial intelligence , microeconomics , linguistics , philosophy , finance , government (linguistics) , financial economics , political science , law
This paper proposes the optimal policies for a fuzzy inventory model considering the holding cost and ordering cost as continuous functions of time. Shortages are allowed and partially backlogged. The demand rate is assumed in such to be linearly dependent on time during on-hand inventory, while during the shortage period, it remains constant. The inventory problem is formulated in crisp environment. Considering the demand rate, holding cost and ordering cost as trapezoidal fuzzy numbers, the proposed problem is transformed into fuzzy model. For this fuzzy model, the signed distance method of defuzzification is applied to determine the average total cost (ATC) in fuzzy environment. The objective is to optimize the ATC and the order quantity. One solved example is provided in order to show the applicability of the proposed model. The convexity of the cost function is verified with the help of 3D-graph.