Fuzzy Inventory Model for Deteriorating Items with Time-varying Demand and Shortages

Abstract

Fuzzy set theory is primarily concerned with how to quantitatively deal with imprecision and uncertainty, and offers the decision maker another tool in addition to the classical deterministic and probabilistic mathematical tools that are used in modeling real-world problems. The present study investigates a fuzzy economic order quantity model for deteriorating items in which demand increases with time. Shortages are allowed and fully backlogged. The demand, holding cost, unit cost, shortage cost and deterioration rate are taken as a triangular fuzzy numbers. Graded Mean Representation, Signed Distance and Centroid methods are used to defuzzify the total cost function and the results obtained by these methods are compared with the help of a numerical example. Sensitivity analysis is also carried out to explore the effect of changes in the values of some of the system parameters. The proposed methodology is applicable to other inventory models under uncertainty.