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Continuous review inventory control in the presence of fuzzy costs

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  • YazgI Tütüncü, G.
  • Aköz, Onur
  • ApaydIn, Aysen
  • Petrovic, Dobrila

Abstract

This paper presents new models of continuous review inventory control with or without backorder in the presence of uncertainty. Fuzzy set concepts are used to treat imprecision regarding the costs of continuous review inventory control, while probability theory is used to treat uncertainty regarding customer demand. Fuzzy total annual cost functions, which involve fuzzy arithmetic operations, are defined using the function principle. The optimal order quantity and the optimal reorder point are found in such a way as to minimize the fuzzy costs. Furthermore, a decision support system has been developed, which can be used for efficient evaluation of continuous review inventory systems with both crisp and fuzzy costs, incorporating a simulation analysis tool.

Suggested Citation

  • YazgI Tütüncü, G. & Aköz, Onur & ApaydIn, Aysen & Petrovic, Dobrila, 2008. "Continuous review inventory control in the presence of fuzzy costs," International Journal of Production Economics, Elsevier, vol. 113(2), pages 775-784, June.
    • Handle: RePEc:eee:proeco:v:113:y:2008:i:2:p:775-784
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    References listed on IDEAS

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    1. Yao, Jing-Shing & Su, Jin-Shieh, 2000. "Fuzzy inventory with backorder for fuzzy total demand based on interval-valued fuzzy set," European Journal of Operational Research, Elsevier, vol. 124(2), pages 390-408, July.
    2. Xie, Ying & Petrovic, Dobrila & Burnham, Keith, 2006. "A heuristic procedure for the two-level control of serial supply chains under fuzzy customer demand," International Journal of Production Economics, Elsevier, vol. 102(1), pages 37-50, July.
    3. Petrovic, Dobrila & Petrovic, Radivoj & Vujosevic, Mirko, 1996. "Fuzzy models for the newsboy problem," International Journal of Production Economics, Elsevier, vol. 45(1-3), pages 435-441, August.
    4. Yao, Jing-Shing & Chiang, Jershan, 2003. "Inventory without backorder with fuzzy total cost and fuzzy storing cost defuzzified by centroid and signed distance," European Journal of Operational Research, Elsevier, vol. 148(2), pages 401-409, July.
    5. Roy, T.K. & Maiti, M., 1997. "A fuzzy EOQ model with demand-dependent unit cost under limited storage capacity," European Journal of Operational Research, Elsevier, vol. 99(2), pages 425-432, June.
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    Cited by:

    1. Dey, Oshmita & Chakraborty, Debjani, 2011. "A fuzzy random continuous review inventory system," International Journal of Production Economics, Elsevier, vol. 132(1), pages 101-106, July.
    2. Larsen, Kim S. & Wøhlk, Sanne, 2010. "Competitive analysis of the online inventory problem," European Journal of Operational Research, Elsevier, vol. 207(2), pages 685-696, December.

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