A stochastic inventory problem with fuzzy shortage cost

A stochastic inventory problem with fuzzy shortage cost

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Article ID: iaor19992191
Country: Netherlands
Volume: 106
Issue: 1
Start Page Number: 90
End Page Number: 94
Publication Date: Apr 1998
Journal: European Journal of Operational Research
Authors: ,
Keywords: fuzzy sets
Abstract:

Up to now, many inventory models have been considered in the literature. Some assume stochastic demands and others consider the deterministic case. Though they include a shortage cost due to lost sales, it is usually assumed to be known concretely and a priori. This paper introduces fuzziness of shortage cost explicitly into the classical newsboy problem. That is, we investigate the so-called fuzzy newsboy problem where its shortage cost is vague and given by an L shape fuzzy number. Then the total expected profit function also becomes a fuzzy number. Finally, we find an optimal ordering quantity realizing the fuzzy max order of the profit function (fuzzy min order considering the profit function) and compare it with the optimal ordering quantity of the non-fuzzy newsboy problem.

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