An analysis of uncertain situation and advance payment system on a double-storage fuzzy inventory model

Abstract

The present research develops a two-warehouse economic order quantity (EOQ) model with imperfect products under fuzzy environment. Usually, the acquiring cost for an inventory model should be paid while receiving its receipt. Sometimes the supplier may offer to pay the purchasing amount in advance. Also, the capacity of warehouse plays a vital role in the inventory models. In lockdown situation, there is no supply to the customer throughout the lockdown period and so the inventory level remains stable during that period. This paper scrutinizes the Fuzzy EOQ model with substandard products which incorporates the notion of advance payment, repair option and lockdown situation. The proportion of defective product is considered as triangular fuzzy number. Fuzzy EOQ model is formulated to obtain the optimal order quantity which maximizes the expected annual profit and endorsed with numerical illustration. The sensitivity analysis for the proposed model is performed to show the impact of fuzziness on the proportion of defective rate along with the changes in parameters.