An order level inventory model under two level storage system with fuzzy demand

TLDR: A fuzzy inventory model with two ware houses (one is the existing storage known as own warehouse and the other is hired on rental basis known as rented warehouse) is developed, which allows constant levels of item deterioration in both houses.

Abstract: Deterministic inventory model with two levels of storage has been studied by numerous authors. In this paper we developed a fuzzy inventory model with two ware houses (one is the existing storage known as own warehouse (OW) and the other is hired on rental basis known as rented warehouse (RW). The model allows constant levels of item deterioration in both houses. The stock is transferred from RW to OW in continuous release pattern and the associated transportation cost is taken into account. To make the model more realistic in nature, fuzzy demand has been considered. Using α-cut for defuzzification, the total variable cost per unit time is derived. Therefore, the problem is reduced to crisp annual costs. The multi-objective model is solved by Global Criteria Method supported by GRG(Generalized Reduced Gradient) Technique, which is illustrated by a numerical example. Keywords: Fuzzy demand, deterioration, defuzzification, warehouse MSC: 90B05.