Optimality test in fuzzy inventory model for restricted budget and space: Move forward to a non-linear programming approach

• Main Author: Pattnaik Monalisha
• Format: Article
• Language: English
• Published: University of Belgrade 2015-01-01
• Series: Yugoslav Journal of Operations Research
• Subjects: fuzzy; NLP; budget; space; optimal decision
• Online Access: http://www.doiserbia.nb.rs/img/doi/0354-0243/2015/0354-02431400023P.pdf

In this paper, the concept of fuzzy Non-Linear Programming Technique is applied to solve an economic order quantity (EOQ) model for restricted budget and space. Since various types of uncertainties and imprecision are inherent in real inventory problems, they are classically modeled using the approaches from the probability theory. However, there are uncertainties that cannot be appropriately treated by the usual probabilistic models. The questions are how to define inventory optimization tasks in such environment and how to interpret the optimal solutions. This paper allow the modification of the Single item EOQ model in presence of fuzzy decision making process where demand is related to the unit price, and the setup cost varies with the quantity produced/Purchased. The modification of objective function, budget, and storage area in the presence of imprecisely estimated parameters are considered. The model is developed by employing different approaches over an infinite planning horizon. It incorporates all the concepts of a fuzzy arithmetic approach and comparative analysis with other non linear models. Investigation of the properties of an optimal solution allows developing an algorithm whose validity is illustrated by an example problem, and two and three dimensional diagrams are represented to this application through MATL(R2009a) software. Sensitivity analysis of the optimal solution is studied with respect to the changes of different parameter values for obtaining managerial insights of the decision problem.