Abstract
Article history: Received 25 October 2011 Accepted February, 3 2012 Available online 18 February 2012 This study investigates optimal pricing and inventory policies for non-instantaneous deteriorating items with permissible delay in payment. The demand rate is as known, continuous and differentiable function of price while holding cost rate, interest paid rate and interest earned rate are characterized as independent fuzzy variables rather than fuzzy numbers as in previous studies. Under these general assumptions, we first formulated a fuzzy expected value model (EVM) and then some useful theoretical results have been derived to characterize the optimal solutions. An efficient algorithm is designed to determine the optimal pricing and inventory policy for the proposed model. The algorithmic procedure is demonstrated by means of numerical examples. © 2012 Growing Science Ltd. All rights reserved
Highlights
According to the modern view, uncertainty is considered essential to science; it is an unavoidable phenomenon but has, a great utility in real world applications
In context of the inventory management, experts usually make interval-valued or linguistic statements about the time parameters and relevant data of inventory system. These interval-valued or linguistic statements lead to non-stochastic uncertainties
The common feature is that the parameters were assumed to be triangular fuzzy numbers or trapezoidal fuzzy numbers
Summary
According to the modern view, uncertainty is considered essential to science; it is an unavoidable phenomenon but has, a great utility in real world applications. In context of the inventory management, experts usually make interval-valued or linguistic statements about the time parameters and relevant data of inventory system These interval-valued or linguistic statements lead to non-stochastic uncertainties. The fuzzy set theory was developed to model uncertainties in non-stochastic sense. Geetha and Uthayakumar (2010) extended Ouyang et al.’s model incorporating time-dependent backlogging rate. Both models consider constant demand rate and cost minimization objective. We consider the time parameters, the holding cost rate and interest paid/earned rate in Geetha and Uthayakumar (2010) model may be varied slightly owing to some uncertainties in non-stochastic sense or uncontrolled environments.
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