Title: A fuzzy random periodic review mixture inventory model with backorder price discount

Authors: Wasim F. Khan; Oshmita Dey

Addresses: Department of Mathematics, Techno India University, West Bengal, Kolkata 91, West Bengal, India ' Department of Mathematics, Techno India University, West Bengal, Kolkata 91, West Bengal, India

Abstract: In this paper, a periodic review inventory model with a mixture of backorders and lost sales is developed under mixed fuzzy random environment. It is assumed that the supplier provides some price discount to control the backorder rate and gives an incentive to the customers to wait for the arrival of their orders rather than take their orders elsewhere. The annual customer demand is considered to be continuous fuzzy random variable following normal distribution. The model is analysed under three scenarios - no price discount, fixed price discount, and controllable price discount. An algorithm is presented to simultaneously determine the optimal values of the review period, the target inventory level, and the backorder price discount, so that the total annual cost is minimised. Numerical examples show that the case of controllable backorder price discount leads to the system incurring lowest operational costs.

Keywords: inventory; periodic review; backorder price discount; continuous fuzzy random variable; normal distribution.

DOI: 10.1504/IJOR.2024.136007

International Journal of Operational Research, 2024 Vol.49 No.1, pp.47 - 64

Received: 11 Dec 2019
Accepted: 06 Apr 2021
Published online: 12 Jan 2024 *

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