A Continuous Review Production-Inventory System with a Variable Preparation Time in a Fuzzy Random Environment

Amalendu Singha Mahapatra, Hardik N Soni, Maheswar Singha Mahapatra, Biswajit Sarkar and Sanat Majumder
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Amalendu Singha Mahapatra: Department of Basic Science and Humanities, Techno International New Town (Formerly Techno India College of Technology), Rajarhat 700156, Kolkata, India
Hardik N Soni: Chimanbhai Patel Post Graduate Institute of Computer Applications, Ahmedabad 380015, Gujarat, India
Maheswar Singha Mahapatra: School of Business, FLAME University, Pune 412115, India
Biswajit Sarkar: Department of Industrial Engineering, Yonsei University, 50 Yonsei-ro, Sinchon-dong, Seodaemun-gu, Seoul 03722, Korea
Sanat Majumder: Department of Mathematics, Indian Institute of Engineering Science and Technology, Shibpur 711103, West Bengal, India

Mathematics, 2021, vol. 9, issue 7, 1-27

Abstract: With the increase in the varieties products and the increasing uncertainty about product demand, the production preparation time is a significant factor in addressing these issues. The trade-off between the reduction of the production preparation time and the associated cost remains a critical decision. With this backdrop, this study presents a continuous review production-inventory model with a variable production preparation time and a time-dependent setup cost. The demand during the preparation time is captured through a min-max distribution-free approach. In a stochastic framework, the order quantity, reorder point, and setup time are optimized by minimizing the expected cost considering the time-value effect. Further, a fuzzy model is formulated to tackle the imprecise nature of the production setup time and demand. Two algorithms are developed using an analytical approach to obtain the optimal solution. A numerical illustration is given to present the key insights of the model for effective inventory management. It is observed that order quantity and total cost are more sensitive at the lower side of the optimal setup time rather than at the higher side. The discount rate is also found to be a sensitive factor while minimizing the total expected cost.

Keywords: continuous review inventory model; controllable preparation time; distribution-free approach; time value of money; fuzzy random demand (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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