Abstract
In this paper, we proposed a generalized economic order quantity (EOQ) – based inventory model using a trade credit policy in a fuzzy sense. The trade credit policy adopted here is a two-level trade credit policy in which the supplier offers the retailer a permissible delay period M, and the retailer, in turn, partially provides customers a permissible delay period N. This study considers fuzzy EOQ model to allow for: (1) selling price dependent demand rate which is imprecise in nature, (2) a profit maximization objective and (3) an imprecise holding cost, ordering cost, purchasing cost, interest earned and interest charged rate. Besides, the cases N⩽M and N⩾M are explored thoroughly. The objective function for the retailer in fuzzy sense is defuzzified using Modified Graded Mean Integration Representation Method. For the defuzzified objective function sufficient conditions for the existence and uniqueness of the optimal solution are provided. An efficient algorithm is designed to determine the optimal pricing and inventory policies for the retailer. Finally, numerical examples are presented to illustrate the proposed model and the effect of key parameters on optimal solution is examined.
Published Version
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