Modelling sequence decision inventory management problem under fuzzy environment

This study considers a specific inventory management problem, where a retailer could arrange a series of sequential orders, and the next order is arranged after the yield of present stage is known. For this matter, a credibilistic dynamic programming model is formulated under uncertain supply and demand, and the mean cost convex programming model of each ordering stage is derived. The goal is to obtain the optimal order quantity at each stage under the uncertain supply and demand that are represented by fuzzy variables. By extending the analytical solutions of the optimal order quantities, the general expression of the optimal order quantity is obtained. Finally, some numerical experiments are conducted to illustrate the effectiveness of the solution, and the optimum results and sensitivity of parameters are illustrated both numerically and graphically. It showed that the effect of supply uncertainty could be mitigated by placing sequential orders in advance, and more bookings occur at the earlier stage due to the uncertainty of the next stage.