An EOQ model for deteriorating items under trade credit financing in the fuzzy sense

Abstract

This paper deals with the problem of determining the economic order quantity (EOQ) for deteriorating items in the fuzzy sense where delay in payments for retailer and customer are permissible and generalizes the earlier published results in this direction. The demand rate, holding cost, ordering cost and purchasing cost are taken as fuzzy numbers. We also assume that the supplier would offer the retailer a delay period for payment and the retailer would also offer the trade credit period to the customer. The total variable cost in fuzzy sense is defuzzified using the graded mean integration representation method. Then we have shown that the defuzzified total variable cost is convex, that is, a unique solution exists. For determination of optimal ordering policies, with the help of theorems we have developed the neccessary algorithms. Finally, the theorems and the algorithms are illustrated with the help of numerical examples.

Keywords:

• EOQ
• Fuzzy annual total cost
• Trade credit
• Graded mean integration representation