A production inventory model with fuzzy random demand and with flexibility and reliability considerations

Abstract

The classical inventory control models assume that items are produced by perfectly reliable production process with a fixed set-up cost. While the reliability of the production process cannot be increased without a price, its set-up cost can be reduced with investment in flexibility improvement. In this paper, a production inventory model with flexibility and reliability (of production process) consideration is developed in an imprecise and uncertain mixed environment. The aim of this paper is to introduce demand as a fuzzy random variable in an imperfect production process. Here, the set-up cost and the reliability of the production process along with the production period are the decision variables. Due to fuzzy-randomness of the demand, expected average profit of the model is a fuzzy quantity and its graded mean integration value (GMIV) is optimized using unconstraint signomial geometric programming to determine optimal decision for the decision maker (DM). A numerical example has been considered to illustrate the model.