A two-warehouse inventory model with stochastic demand, controllable lead time and fuzzy present value: a technique to deal with arbitrary fuzzy number

Mahendra Rong and Manoranjan Maiti

International Journal of Operational Research, 2010, vol. 8, issue 2, 208-229

Abstract: Nowadays, there is an acute scarcity for showroom space in the important marketplaces such as supermarket, corporation market, etc. in any country due to the presence of foreign and multinational business houses as a result of globalisation. For this reason, two warehouse concepts – one small showroom and the other comparatively large at a nearby place. At present, value of money changes due to the worldwide volatile economic condition. In the above context, a business house is in a fix as to how much to procure against the random demand of a commodity for minimum cost. In this paper, a two-warehouse inventory management policy is presented for stochastic demand with controllable lead time. Three inventory models are presented with and without the change in money value which is taken into account with constant or fuzzy interest rate where impreciseness is of arbitrary nature. In all these cases, average cost functions are derived and solved using a gradient based non-linear optimisation technique (LINGO).

Keywords: inventory modelling; lead times; present value; stochastic demand; triangular-trapezoidal approximation; two warehouse inventory management; arbitrary fuzzy numbers; nonlinear optimisation; interest rates. (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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