Optimal Replenishment Policies and Trade Credit for Integrated Inventory Problems in Fuzzy Environment

Abstract

In this highly volatile, uncertain, complex, and ambiguous (VUCA) environment, a fuzzy inventory optimization problem is a hot topic that received the most attention from both academicians and practitioners. In this paper, the authors have studied the integrated inventory problems under trade credit in fuzzy environments, where the demand rate and deterioration rate are taken here as triangular fuzzy numbers. Accordingly, three types of fuzzy programming models as fuzzy expected cost minimization model, fuzzy α-cost minimization model, and credibility maximization model are built according to different management goals. Since the problem is shown to be NP-hard, this research focuses on proposing a hybrid intelligent algorithm by integrating fuzzy simulation, neural network, and genetic algorithm for solving these models. Then, some numerical examples are presented to illustrate the benefits of the models and evaluate the efficiency of the algorithms. The computational experiments show that the trade credit strategy has a positive impact on improving the supply chain’s performance and reducing its total cost. In addition, the maximum relative error of the objective values is less than 1%, which implies that the hybrid intelligent algorithm is robust to the parameter settings and effective in solving our models. Finally, the practical implications are discussed and useful managerial insights are given.

Effects of Supply Reliability, Risk Aversion, and Wealth on Retailer’s Optimal Order Strategy

“…Whitin [17] was the frst to propose the newsvendor model. Since then, several extensions of the classical model have been proposed [18] to solve the problem of optimal order quantity with uncertain demand. Li et al [19] considered a single-period inventory problem in the presence of demand uncertainty.…”