Effective inventory management using postponement strategy with fuzzy cost

Abstract

In this article, we consider a two level supply chain to evaluate the impact of postponement strategy on the retailer. Here the cost parameters are fuzzified. Signed distance method is used to defuzzify and to obtain the estimation of the total cost in the fuzzy sense. The common variable production cost, common fixed cost and the common unit holding cost per unit time are assumed to be fuzzy in nature. Inventory models are formulated for postponement system and independent system such that the total average inventory cost function per unit time is minimized. Algorithms are given to derive the optimal solutions of the proposed model. Theoretical analysis and the computational procedure helps to study the impact of deterioration rate on the optimal inventory policies. A comparative study between the postponement system and independent system considering fuzzy costs is also made.