Effect of demand boosting policy on optimal inventory policy with backorder in fuzzy environment under the effect of learning

Dharmendra Yadav, S.R. Singh and Rachna Kumari

International Journal of Procurement Management, 2012, vol. 5, issue 2, 178-201

Abstract: Most of inventory control policies are very sensitive to different marketing strategy (especially in chemical, food and automotive industries) under the learning effect. Realising the importance that there is a functional relationship between demand rate and advertisement frequency of such inventory, a marketing model is developed for determining the economic order quantity and backorder level. This model also incorporates the effect of learning in holding cost, ordering cost and on the number of defective items present in each lot. Profit expression is fuzzy due to impreciseness in demand. In order to determine the optimal values, we obtained equivalent crisp expression by applying signed distance method. In place of complex and tedious method of calculus a closed form solution is obtained by using algebraic method. A numerical example is presented to study the feasibility and applicability of the proposed model.

Keywords: economic order quantity; EOQ; advertisements; adverts; arithmetic-geometric inequality; learning effect; backorder levels; signed distance method; demand rate; inventory policy; fuzzy environment; inventory control; marketing strategy; advertisement frequency; marketing modelling; holding cost; ordering cost; defective items. (search for similar items in EconPapers)
Date: 2012
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