Optimal decision under fuzzy uncertainty for order allocation planning with uncertain parameters: Single period case

Abstract

Inventory management on manufacturer and retail industries is commonly containing some uncertain parameters like future cost and future demand value where the decision-maker has to execute the optimal decision under these parameter's uncertainty. While the data is available then these uncertain parameters can be assigned as a random variable and a probabilistic approach can be used to solve. But, if there is no data available for these uncertain parameters, then a fuzzy uncertainty approach can be used to solve this problem that is discussed in this paper. We have developed a mathematical model that can be used to calculate the optimal decision under fuzzy uncertainty where the decision is calculated and executed before the uncertain parameters are revealed. Numerical experiment results show that the problem was solved by using the proposed mathematical model, the optimal decision was achieved i.e. the optimal procurement volume product type and the optimal stored product volume in the inventory.