INTERACTIVE FUZZY INVENTORY MODEL WITH RAMP DEMAND UNDER TRADE CREDIT FINANCING

The present paper depicts an interactive inventory model between seller and buyer where demand is assumed to be a ramp type function and deterioration to be a two parameter weibull distribution function. Shortages are allowed and fully backlogged. Optimal solution is achieved by both crisp and fuzzy models. Holding cost, deterioration cost, shortage cost and ordering cost are treated as triangular and trapezoidal fuzzy numbers. Defuzzification of the total average cost is carried out by signed distance and graded mean integration method. Convexity of the cost function is also tested graphically. The derived model is illustrated by numerical example. This work has attempted to better understand the risk sharing role of trade credit in management system that is how trade credit enhances supply chain efficiency by allowing the retailer to partially share the demand risk to the supplier. With this role, in equilibrium, conditional trade credit will be an indispensable external source of management system for inventory planning.