Abstract

This paper considers deteriorating production inventory model of a supply chain system considering transportation cost depending upon quantity ordered and distance from supplier’s production unit to retailer’s warehouse. First a crisp model is developed and considering some parameters of fuzzy nature affecting inventory cost, a corresponding fuzzy model is developed. In most inventory modelling separate model has been developed by many researchers for retailer and supplier and rarely transportation cost is taken into account. In the present modelling total average inventory cost of supply chain including retailers and supplierstogether is minimized under crisp and fuzzy environment. Demand parameter of retailer’s is considered as inventory level dependent. During production and storage, constant deterioration occurs at retailer’s and supplier’s warehouse. The objective of this paper is to derive an inventory model that together minimize the total average inventory cost of supply chain using signed Distance Method to defuzzyfy fuzzy numbers. Numerical example is presented to validate the model applicability and sensitivity analysis has been performed on fuzzy parameters in case of fuzzy model.

Key words: Triangular Fuzzy Number, Signed Distance Methods, Inventory level dependent demand,distance and ordered quantity dependent transportation cost.