An integrated production-distribution inventory system for deteriorating products in fuzzy environment

Abstract

A key issue for the organization of responsiveness to uncertainties is intelligent manufacturing design of a complex production inventory system. To effectively handle imprecision or uncertainty, fuzzy methodologies provide a useful way to model vagueness in human recognition and judgment. Fuzzy numbers are frequently used in applications to ensure easy handling of the realistic problem. Priyan and Uthayakumar (2015) proposed an integrated production-distribution inventory system for deteriorating products that involve fuzzy deterioration rate and variable setup cost environment. They offered strategic decision-making to produce and supply products to minimize total system cost under fuzzy deterioration rate and variable setup cost environment. In this paper, their model is extended by considering the demand, production rate, deterioration rate, holding cost for both the vendor and the buyer and the ordering cost for the buyer as the triangular fuzzy number and the setup cost as a function of capital expenditure. Signed distance method is used to defuzzify the total cost and differential calculus optimization technique is employed to find optimal solutions of the model. Numerical example and sensitivity analysis are depicted to feature the contrasts among crisp and the fuzzy cases.