Order Quantity Problem for Fuzzy Market Demand

Abstract

In the real world, due to the fuzziness of market demand, shortage risks exist in inventory management. Based on the credibility theory, in this paper we propose a new measure method to deal with shortage risk for inventory through catering to managers with different risk preferences by setting a different service levels in fuzzy environment. Based on this new measure method, a new model on the order quantity constrainted by the service levels, budget funds and inventory space in the fuzzy environment is proposed and an intelligent algorithm is designed to give a general solution. One numerical example is also presented to illustrate the optimization idea and the effectiveness of the designed algorithm. Thereinafter, the article discusses the impact of cycle service level(CSL) on order quantity.