A production inventory model for deteriorating item with ramp type demand allowing inflation and shortages under fuzziness

• Published in: Economic modelling 2015-04, Vol.46, p.334-345
• Main Authors: Pal, Shilpi, Mahapatra, G.S., Samanta, G.P.
• Format: Article
• Language: English
• Subjects: Decision making models; Demand functions; Deterioration; Economic theory; Fuzzy logic; Inflation; Inventory; Inventory management; Money; Production; Products; Ramp-type demand rate; Shortage; Shortages; Studies; Triangular fuzzy number; Utility functions
• ISSN: 0264-9993; 1873-6122
• DOI: 10.1016/j.econmod.2014.12.031

Economic production quantity (EPQ) is the quantity of a product that should be manufactured in a single batch so as to minimize the total cost. In classical model EPQ only applies where the demand for a product and production rate is constant over the year. But in reality these parameters vary with time in different scenarios. In this paper we have considered a production inventory model for deteriorating items with ramp type demand rate under the effect of inflation and shortages under fuzziness. The deterioration rate is represented by a two-parameter Weibull distribution. As inflation erodes the value of money so we have also considered the effect of inflation when there is shortage in the stock under finite time horizon. Some parameters are vaguely or unclearly defined or whose values are imprecise or determined based on subjective beliefs of individuals. Therefore the inventory model is solved under fuzzy environment to evaluate the optimum solution of the model in different cases. We have optimized our solution by considering production time and production rate as decision variables in two separate cases. While incorporating symmetric triangular fuzzy number we use total λ-integral value to defuzzify the solution. Finally, utility of the model is presented by using some numerical examples and sensitivity analysis and the results are analyzed. •An EPQ model is developed by optimizing total cost considering production time and rate as decision variables.•Ramp type demand function of time with deterioration as Weibull's distribution is considered.•Shortages, inflation and finite time horizon are considered.•We have considered holding cost, purchase cost and inflation in fuzzy parameter.•We have done comparison between fuzzy and crisp parameters and concluded which model is better.