A single period inventory model with a truncated normally distributed fuzzy random variable demand

Abstract

In this article, a single period inventory model has been considered in the mixed fuzzy random environment by assuming the annual customer demand to be a fuzzy random variable. Since assuming demand to be normally distributed implies that some amount of demand information is being automatically taken to be negative, the model has been developed for two cases, using the non-truncated and the truncated normal distributions. The problem has been developed to represent scenarios where the aim of the decision-maker is to determine the optimal order quantity such that the expected profit is greater than or equal to a predetermined target. This ‘greater than or equal to’ inequality has been modelled as a fuzzy inequality and a methodology has been developed to this effect. This methodology has been illustrated through a numerical example.