Optimal policy for fuzzy expected value production inventory model with imprecise production preparation-time

Abstract

A great deal of research has been done on economic production quantity (EPQ) model, which concern deterministic or stochastic or fuzzy demand and cost situations. In this paper, the EPQ model with imprecise demand and production preparation time is considered which are characterized as independent fuzzy variables rather than fuzzy numbers as in previous studies. Based on an expected value criterion or a credibility criterion, a fuzzy expected value model (EVM) is constructed. The purpose of the fuzzy EVM is to determine the optimal policy such that the fuzzy expected value of the total cost is minimal. In order to obtain the exact expected value directly, instead of relying on simulation procedure, the results for uncertain variables with uncertainty distribution are exploited by treating them as fuzzy variables with credibility distribution. The mathematical analysis is carried out to compute exact expected values. Numerical study is also provided to demonstrate the contribution of our model.