Volume 3 Issue 2 pp. 133-144 January, 2013


EOQ in fuzzy environment and trade credit


Nita H Shaha, Sarla Pareek and Isha Sangal


Now-a-days, the offer of credit period to the retailer for settling the account for the units purchased by the supplier is considered to be the most beneficial policy. In this article, an attempt is made to formulate an economic order quantity model under fuzzy environment where delay in payment for the retailer is permissible. The demand rate, ordering cost and selling price per item are taken as triangular fuzzy numbers. The α-cut representation method is used to calculate the optimum cycle time and total optimum cost. The optimum cycle time and total optimum cost in fuzzy sense is de-fuzzified using the centre of gravity method.


DOI: 10.5267/j.ijiec.2011.07.001

Keywords: EOQ, Trade credit, Fuzzy set theory

References

Aggarwal, S. P., & Jaggi, C. K. (1995). Ordering policies of deteriorating items under permissible delay in payments. Journal of Operational Research Society, 46, 658-662.

Chang H. J., & Dye C. Y. (2001). An inventory model for deteriorating items with partial backlogging and permissible delay in payments. International Journal of Systems Science, 32, 345-352.

Chang, S. C., Yao J. S., & Lee H. M. (1998). Economic reorder point for fuzzy backorder quantity. European Journal of Operational Research, 109, 183-202.

Chung, K. J. (1998). A theorem on the determination of economic order quantity under conditions of permissible delay in payments. Journal of Information and Optimization Science, 25: 49-52.

De, S. K., & Goswami, A. (2006). An EOQ model with fuzzy inflation rate and fuzzy deterioration rate when a delay in payment is permissible. International Journal of Systems Science, 37(5), 323-335.

De, S. K., Kundu, P. K., Goswami, A. (2003). An economic production quantity inventory model involving fuzzy demand rate and fuzzy deterioration rate. Journal of Applied Mathematics and Computing, 12(1-2), 251-260.

Gani, A. N., & Maheswari, S. (2010). Supply chain model for the retailer’s ordering policy under two levels of delay payments in fuzzy environment. Applied Mathematical Sciences, 4(24), 1155-1164.

Goyal, S. K. (1985). Economic order quantity under condition of permissible delay in payments. Journal of Operational Research Society, 36(4), 335-338.

Huang, Y. F. (2007). Supply chain model for the retailer’s ordering policy under two levels of delay payments derived algebraically. Opsearch, 44(4), 366-377.

Huang, Y. F., & Chung K. J. (2003). Optimal replenishment and payment policies in the EOQ model under cash discount and trade credit. Asia Pacific Journal of Operational Research, 20, 177-190.

Hwang, H. & Shinn, S. W. (1997). Retailer’s pricing and lot sizing policy for exponentially deteriorating product under the condition of permissible delay in payments. Computers and Operations Research, 24, 539-547.

Jamal, A. M. M., Sarker B. R., & Wang S. (1997). An ordering policy for deteriorating items with allowable shortages and permissible delay in payment. Journal of Operational Research Society, 48, 826-833.

Jamal, A. M. M., Sarker B. R., & Wang S. (2000). Optimal payment time for a retailer under permitted delay of payment by the wholesaler. International Journal of Production Economics, 66, 59-66.

Klir, G., & Yuan B. (2005). Fuzzy sets and fuzzy logic, theory and applications. Prentice, Hall of India.

Lee, H. M., & Yao J. S. (1998). Economic production quantity for fuzzy demand quantity and fuzzy production quantity. European Journal of Operational Research, 109, 203-211.

Lee, K. (2005). First Course on Fuzzy Theory and Applications. Springer-Verlag, Berlin Heidelberg.

Lin, D. C., & Yao, J. S. (2000). Fuzzy economic production for production inventory. Fuzzy Sets and Systems, 111, 465-495.

Sarker B. R., Jamal A. M. M., & Wang S. (2000). Optimal payment time under permissible delay for products with deterioration. Production Planning & Control, 11, 380-390.

Shah Nita H. and Shah Y. K. (1998). “A discrete-in-time probabilistic inventory model for deteriorating items under conditions of permissible delay in payments”, International Journal of Systems Science, 29: 121-126.

Shah, N. H. (1993-a). A lot – size model for exponentially decaying inventory when delay in payments is permissible”, Cahiers du Centre D’ Etudes de Recherche Operationnell Operations Research, Statistics and Applied Mathematik, 35, 1-9.

Shah, N. H. (1993-b). A probabilistic order level system when delay in payments is permissible. Journal of the Korean Operations Research and Management Science, 18(2), 175-183.

Shinn S. W., & Hwang H. (2003). Optimal pricing and ordering policies for retailers under order-size-dependent delay in payments. Computers and Operations Research, 30, 35-50.

Shinn S. W., Hwang H. P., & Sung S. (1996). Joint price and lot size determination under conditions of permissible delay in payments and quantity discounts for freight cost. European Journal of Operational Research, 91, 528-542.

Teng J. T. (2002). On the economic order quantity under conditions of permissible delay in payments. Journal of Operational Research Society, 53, 915-918.

Teng J. T., Chang C. T., & Goyal S. K. (2005). Optimal pricing and ordering policy under permissible delay in payments. International Journal of Production Economics, 97, 121-129.

Yao J. S., Chang S. C., & Su J. S. (2000). Fuzzy inventory without backorder for fuzzy order quantity and fuzzy total demand quantity. Computer and Operations Research, 27, 935-962.