FUZZY EOQ MODEL

Inventory refers to any kind of a resource that has economic value and is maintained to fulfill the
present and future needs of an organization. Fred Hansman defined inventory as: An idle resource of any
kind provided such a resource has economic value. Such resources may be classified into three categories
(i) Physical resources such as raw materials, semi finished goods, finished goods, spare parts, lubricants,
etc., (ii) human resources such as unused labour (manpower) and (iii) financial resources such as working
capital, etc. The objective is to minimize the total cost and maximize the profit.
There are many kinds of uncertainty arising in real world problems and a variety of techniques
are needed for modelling them. Fuzzy sets deal with the type of uncertainty that arises when the
boundaries of a class of objects are not sharply defined. Most of our traditional tools for formal modelling
reasoning and computing are crisp, deterministic and precise in character. Fuzzy set theory provides a
strict mathematical framework in which vague conceptual phenomena can be precisely and rigorously
studied. It can also be considered as a modelling language, well suited for situations in which fuzzy
relations, criteria and phenomena exist. In crisp inventory models, all the parameters in the total cost are
known and have unambiguous fixed values. In addition, the real variable of the total cost is positive. But
in reality, some quantities will remain uncertain. Hence there is a need to consider the fuzzy inventory
model.
This work investigates a group of computing schemes for the economic order quantity as fuzzy
values of the inventory with/without back order model. Numerical examples are solved successfully to
demonstrate the validity of the proposed models. Optimization of decentralized ordering model, three
echelon joint model and economic order quantity models are discussed using function principle, graded
mean integration representation method and extension of Lagrangean method are used to obtain the
optimum value.
Fuzzy optimal order quantity of retailer model is obtained using Kuhn-Tucker conditions. Signed
distance defuzzification method is used to find the optimal EOQ with backordering in the fuzzy sense.
Yagers ranking index is utilized in order to find the fuzzy inventory model with two backorder costs. The
upper and lower bound of the fuzzy optimal order quantity is evaluated through fuzzy geometric
programming. Fuzzy optimal lot size and backordering quantity are determined using parametric non
linear programming through Zadehs extension principle. Among the various types of fuzzy numbers
triangular and trapezoidal numbers are used as input parameters for discussion in the different types of
above mentioned inventory models.