A periodic review inventory model involving fuzzy expected demand short and fuzzy backorder rate

The purpose of this paper is to extend the Ouyang and Chuang periodic review inventory model with variable lead time by considering the fuzziness of expected demand shortage and backorder rate. We fuzzify the expected shortage quantity at the end of cycle and the backorder (or lost sales) rate, and then obtain the fuzzy total expected annual cost. Using the signed distance method to defuzzify, we derive the estimate of total expected annual cost in the fuzzy sense. For the proposed model, we provide a solution procedure to find the optimal review period and optimal lead time in the fuzzy sense so that the total expected annual cost in the fuzzy sense has a minimum value. Furthermore, a numerical example is provided and the results of fuzzy and crisp models are compared.