On an EOQ model with service level constraint under fuzzy-stochastic demand and variable lead-time

Abstract

This study deals with an EOQ inventory model with fuzzy stochastic demand and controllable lead-time by relaxing the assumption that demand during lead-time follows a specific probability distribution. Here considering the unsatisfied demands to be partially backordered, both lead-time and order quantity are considered as the decision variables. Instead of having a stockout term in the objective function, a service level constraint, which implies that the stockout level per cycle is bounded, is added to the model. This study, we provide an elegant methodology to determine the optimal order quantity and reorder point such that total expected annual cost in fuzzy sense has a minimum value. Finally the proposed model is illustrated by a numerical example.