A fuzzy random continuous review inventory model with a mixture of backorders and lost sales under imprecise chance constraint

Oshmita Dey, Bibhas C. Giri and Debjani Chakraborty

International Journal of Operational Research, 2016, vol. 26, issue 1, 34-51

Abstract: The article investigates a constrained continuous review inventory system with a mixture of backorders and lost sales. The proposed model is developed with the annual customer demand incorporated as a fuzzy random variable. The lead-time is assumed to be constant while the lead-time demand is assumed to be connected to the annual fuzzy random demand through the length of the lead-time. A budget constraint is imposed on the model in the form of an 'imprecise' chance constraint to present a possible way of quantifying fuzzily defined uncertain information of the constraint. A methodology is proposed to determine the optimal order quantity and the reorder point such that the total cost incurred is minimised subject to the constraint. A numerical example is given to illustrate the proposed methodology.

Keywords: continuous review; inventory modelling; backorders; lost sales; fuzzy random demand; imprecise chance constraints; fuzzy logic; order quantity; reorder point. (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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