Inventory model with penalty cost and shortage cost using fuzzy numbers

Abstract

In this paper, an inventory model with penalty cost and shortage cost is formulated. The aim of this research work is to minimise the time period, total cost and the order quantity. To achieve this, the formulated inventory model is converted to fuzzy inventory model by considering the parameters holding cost, demand and setup cost as pentagonal fuzzy number, triangular fuzzy number and trapezoidal fuzzy number. To find the optimum time period and optimum order quantity graded mean integration method and signed distance method is used for defuzzification. Numerical examples have been given in order to explain the model clearly. Sensitivity analysis is given for various values of deterioration time and also for comparing fuzzy numbers.