Single cycle supply chain coordination model for fuzzy stochastic demand of perishable items

Abstract

Market demand of the perishable bakery products are volatile. Hence, demand of such items are random variable. The most appealing demand distribution of such items is lognormal demand distribution. Using historical data, the parameters of lognormal distribution are obtained. But, there is a problem of overestimation or underestimation of the parameters. Fuzzy triangular numbers are used to overcome such problems. Single period (newsboy) inventory model is used to obtain an optimal order quantity. The retailers and manufacturers profit is obtained by using the supply chain coordination model. At the end of day, all the remaining items rotted. Hence, there is no gain from unsold items. Also, the some items are defective at the time of purchase. Thus, loss sharing strategy is proposed between manufacturers and retailers. All of these aspects are incorporated in the supply chain coordination model. The data is collected from Koregaon Park, Pune market, India to illustrate the methodology.