A (Q,R) model for fuzzified deterioration under cobweb phenomenon and permissible delay in payment

Abstract

There always exists a significant time lag between production and consumption of the inventory items and in this lag producers face the risk of decision making not only about levels of production and consumption but also deterioration of the items that take place during the lag. In order to provide a scientific foundation to decision making about optimal quantity and price of the items, a (Q,R) model is here studied for the fuzzified deterioration occurring in time lag between production and consumption of items that deals with the traditional cobweb phenomenon and an attractive policy of permissible delay in the payment. A computational algorithm has been developed to solve the problem in order to attain the optimal quantity and its price for the model. The paper also presents the sensitivity analysis and comparative study of this model under crisp and fuzzy environments with the help of illustrative examples to simply gain the better perspectives of the model from the application point of view. © 2010 Elsevier Ltd. All rights reserved.