Development of an EOQ Model for Single Source to Multi Destination: Multi Deteriorating Products under Fuzzy Environment

Review Of Literature

Transportation costs may be influenced by decisions regarding choice of model, size and type of shipments. In fact, transportation decisions may influence inventory decisions. Inventory management and transportation policy interact, particularly, “when alternatives exist for transporting replacement inventory from a vendor or a plant, and each alternative necessitates different parameters for the management of inventories” (Constable & Whybark, 1978). Russell and Krajewski (1991) presented a simple analytical approach for finding the order quantity that minimizes total purchase costs which reflects both transportation economies and quantity discounts. Chung and Tsai (2001) derive an inventory model for deteriorating items with the demand of linear trend and shortages during the finite planning horizon considering the time value of money. It is also seen that the demand of a consumer product usually varies with time and hence, the demand rate should be taken as time-dependent. Weiguo and Xue (2011) establishes inventory control model of deteriorating items based on time under the VMI mode, it introduced the fuzzy membership function of the decay rate based on the model in the past. Hou, Huang, and Lin (2011) presents an inventory model for deteriorating items with stock-dependent selling rate under inflation and time value of money over a finite planning horizon. In the model, shortages are allowed and the unsatisfied demand is partially backlogged at the exponential rate with respect to the waiting time. Tu, Lo, and Yang (2011) develops a two-echelon inventory model with mutual beneficial pricing strategy with considering fuzzy annual demand; single vendor and multiple buyers in this model. This pricing strategy can benefit the vendor more than multiple buyers in the integrated system, when price reduction is incorporated to entice the buyers to accept the minimum total cost. Xu and Zhai (2008) develop an optimal technique for dealing with the fuzziness aspect of demand uncertainties. Triangular fuzzy numbers are used to model external demand and decision models in both non-coordination and coordination situations are constructed.