International Journal of Pure and Applied Mathematics

Volume 118 No. 22 2018, 1481-1494

ISSN: 1314-3395 (on-line version)
url: http://acadpubl.eu/hub
Special Issue
ijpam.eu

INTEGRATED MODEL WITH FLEXIBLE PRODUCTION RATE FOR A

DETERIORATING ITEM AND PARTIAL BACKLOGGING UNDER THE
EFFECT OF INFLATION IN FUZZY FRAMEWORK

Vandana1, Dharmendra2 and S.R.Singh3

1
Department of Mathematics, K.L.Mehta Dayanand College, Faridabad-121002(Haryana) India
2
Department of Mathematics, Vardhman (P.G) College, Bijnor-246701(U.P) India
3
Department of Mathematics, C.C.S. University Meerut-246701orresponding author
1
vandna.acme@gmail.com,2dharmendrayadav3580@gmail.com,3shivrajpundir@gmail.com

Abstract: In the recent years, the academician
and the inventory practitioners pay considerable
attention for the coordination of the manufacturer,
wholesaler and retailer. Traditionally, in supply chain
the primary focus of the timing of the delivery
quantities. But now-a-days they share the information
regarding the demand of customer and inventory. By
doing this operating cost of the inventory system
reduces. In the traditional supply chain inventory
model, it is usually assumed that the retailer has storage
space with unlimited capacity. Warehouse with infinite
storage capacity in main market is not possible in real
life situation. So this assumption made by the inventory
practitioners is not practicable. Hence, there is a
requirement to deal the supply chain inventory model
in different scenario. There are many factors which
influence the retailer to buy more than their own
warehouse capacity. So, in this situation it is
beneficiary for the retailer to take rented warehouse
house at some distance from the market place. Since,
the rented warehouse (RW) incurs additional cost of
inventory handling and has a better preservation facility
as compared with own warehouse so we may assume
that there is higher holding cost and lower deterioration
cost for the rented warehouse. To reduce the inventory
costs, retailer stores inventory in OW before RW but
clear the inventory in RW before OW.
Goyal (1976) was the first researcher who
introduces the idea of joint total cost for the supplier
and the buyer. Pake and Cohen (1993) used stochastic
sub-models to calculate the values of the included
random variables for analyzing the integrated system.
Gyana and Bhabha (1999) explored a single
manufacturing system for procurement of raw materials
with a multi-ordering policy that minimized the total
inventory costs of both the raw materials and the
finished goods. Sarkar et al. (2000) explored a supply
chain model for determining an optimal ordering policy
under inflation and allowable shortages. Chien and
Lin (2004) investigated the optimal order interval and
discount price such that the joint total cost was
minimized during a finite planning horizon. Ahmed et
al. (2008) have coordinated a two level supply chain in
which they considered production interruptions for
restoring of the quality of the production process. Jha
and Shanker (2009) considered a two-echelon supply
chain inventory problem consisting of a single-vendor
and a single-buyer. In the system under study, a vendor
produced a product in a batch production environment
and supplied it to a buyer. Also, buyer’s lead time was
controllable which can be shortened at an added cost
and all shortages were backordered. Sajadieh et al.
(2010) developed an integrated vendor–buyer model
for a two-stage supply chain. The vendor manufactures
the product and delivers it to the buyer. The items
delivered were presented to the end customers in a
display area. Here, the demand was assumed to be
positively dependent on the amount of items displayed.
The objective was to maximize total supply chain
profit. Yadav et al. (2013) developed three-stage
supply chain (SC) coordination focusing on the
fuzziness as well as randomness aspect of demand and
production rate. Handa et al. (2014) developed a
mixed integrated manufacturing-inventory model
where a manufacturer produces item in a batch
production environment and supplies it to a set of
buyers.
Most of the classical supply chain inventory
models assumed the potential worth of the inventory
remains constant during the storage period. But in real
situation, deterioration occurs when inventory present
physically in warehouse. Thus, deterioration of
inventory items present is stock is a realistic
phenomenon which produces direct impact on the
inventory policy. Deterioration is the change, damage,
decay, spoilage, evaporation, obsolescence, pilferage,
and loss of utility or loss of marginal value of a
commodity that results in decreasing usefulness from

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International Journal of Pure and Applied Mathematics
the original one. Most products such as medicine,
blood, fish, alcohol, gasoline, vegetables and
radioactive chemicals have finite shelf life, and start to
deteriorate once they are replenished. In addition, for
certain types of commodities, deterioration is usually
observed during their normal storage period.
Incorporating this phenomenon, Chung and Huang
(2007) developed two-warehouse inventory model for
deteriorating items under trade credit financing. Min et
al. (2010) developed an inventory model for
deteriorating items under stock-dependent and two-
level trade credit to study the retailer’s optimal ordering
policy. Soni (2013) extended the work of Min et al.
(2010) by incorporating a constraint on the maximum
inventory level. Yadav et al. (2015) developed the
retailer’s inventory model in fuzzy environment for
deteriorating items to determine the optimal cycle time
and payment time for a retailer.
In most of the inventory models unrealistically
assume that during stock-out either all demand is
backlogged or all is lost. In reality often some
customers are willing to wait until replenishment,
especially if the wait will be short, while others are
more impatient and go elsewhere. The backlogging rate
depends on the time to replenishment-the longer
customers must wait, the greater the fraction of lost
sales. Wee (1999) formulated an inventory model with
quantity discount, pricing and partial backordering
when the product in stock deteriorates with times.
Skouri and Papachristos (2003) proposed an
algorithm to find the optimal stopping and restarting
manufacturing times for EOQ model with deteriorating
items and time-dependent partial backlogging. Wee et
al. (2005) developed a two-warehouse inventory model
in inflationary environment with partial backordering
and Weibull distribution deterioration. Lo et al. (2007)
investigated a two-echelon system with partial
backlogging, two-parameter deterioration rate and
constant rate of demand. Pentico et al. (2009)
proposed the new and/or alternative approaches to
solve the EPQ model with partial backordering.
Kumar et al. (2013) developed an inventory model
with two-warehouse system under the effect of learning
and partial backordering in inflationary environment.
Goyal et al. (2015) investigated an EOQ model in
which the demand of items is fuzzy in nature and
depends on the frequency of advertisement. Learning
effect on number of defective items present in each lot
is considered and the possibility of lost sale and
backorder are also analyzed.
From the above literature it is observed that
most of the inventory practitioners assumed that the
different cost associated to inventory system is precise
in nature. However, these parameters deviate from one
cycle to another cycle due to vagueness and
impreciseness. For example, the ordering cost is
influenced by various factors such as transportation
cost, fuel prices etc. and these costs continuously
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Special Issue
changes due to inflation and many other factors. So, in
the presence of various uncertainties it is difficult to
calculate different cost such as ordering cost, holding
cost, purchasing cost, shortages cost and lost sale cost
precisely. Moreover, in many cases sufficient historical
data are also not available to the inventory practitioners
especially for newly launched product or launching of
product with new specification or due to the change in
supply chain environment. All of these raise the
challenge in front of the inventory practitioner to
determine the inventory policy. To cope up with the
presence of impreciseness it is better to characterize
cost parameters using fuzzy numbers. Many inventory
problems incorporating fuzziness have been
investigated (see Vijayan and Ouyang, 2008;
Handfield et al., 2009; Sadjadi et al., 2010; Liu,
2012; Mahata and Goswami, 2013 and references
therein).
From the above literature survey it is observed
that most of the inventory practitioner developed two-
warehouse system for retailer point of view. While
from literature it is observed that decision taken as
integrated point of view is more beneficiary in place of
taking by individual entities. Thus previous works fall
short of regarding supply chain perspective. Therefore
in the present study a supply chain system consisting of
one manufacturer, one wholesaler and one retailer
(having two different warehouses one known as own-
warehouse (OW) and other is rented warehouse (RW))
has been considered. It has been assumed that there are
different deterioration rate at OW and RW due to
different handling facility. Here, shortages are allowed
and partially backlogged at retailer end only. The
holding cost at RW is higher as compared to OW.
Whole of the study is carried out in inflationary
environment. Further, different cost associated with
inventory may be flexible with some vagueness as to
their values. For this type of parameters statistical
estimations proved to be inefficient due to lack of
historical data. In this situation, a suitable way to
handle the imprecise is to consider as fuzzy parameters.
Due to this the objective function becomes
impreciseness in nature. To obtain the optimal values of
the decision variables an equivalent deterministic
expression of objective function can be obtained by
defuzzifying using modified graded mean integration
method. A numerical example and sensitivity analysis
are presented to illustrate the models.
2. ASSUMPTIONS AND NOTATIONS
2.1 ASSUMPTIONS:-
In developing the mathematical models of the
inventory system for this paper, the following common
assumptions are used:
1. Supply chain system consists of one manufacturer,
one wholesaler and one retailer has been
considered.
2. System delivers a perishable item to the end
customer.
International Journal of Pure and Applied Mathematics Special Issue

3. There is no lead time at the end of retailer and The purchasing cost for the retailer
wholesaler. per unit which is imprecise in nature

= , , ,
4. Shortages are allowed at the retailer ends while it is is given as
not allowed at wholesaler ends. Shortages are
partially backlogged. The purchasing cost for the
5. Retailer has two warehouses i.e., own warehouse wholesaler per unit which is imprecise

= , , ,
(OW) of fixed capacity (W) and rented warehouse in nature is given as

(RW) of infinite capacity.
6. The holding costs in RW are higher than those in
OW.
7. Unit manufacturing cost is the function of
production rate.
8. Deterioration occurs as soon as items are received
into inventory.
9. There is no replacement or repair of deteriorating
items during the period under consideration.
ℎ!
The holding cost for the manufacturer
for raw material per unit which is
ℎ! = ℎ! , ℎ! , ℎ! , ℎ!
imprecise in nature is given as
ℎ" The holding cost for finished product
for the manufacturer per unit which is
ℎ = ℎ" , ℎ" , ℎ" , ℎ"
imprecise in nature is given as

ℎ#
10. Different costs associated to system consider
constant for crisp model while for fuzzy model they The holding cost for the retailer’s own
are fuzzy in nature. warehouse per unit which is imprecise

ℎ# = ℎ# , ℎ# , ℎ# , ℎ#
2.2 Notations:- in nature is given as

ℎ
With help of following notations, mathematical
model for integrated system has been formulated in this The holding cost for the retailer’s
chapter. rented warehouse per unit which is

ℎ = ℎ ,ℎ ,ℎ ,ℎ
W Capacity of OW imprecise in nature is given as

ℎ
Im(t) The inventory level of manufacturer at any
time ‘t’ The holding cost for the wholesaler
The inventory level at the wholesaler per unit which is imprecise in nature

ℎ = ℎ ,ℎ ,ℎ ,ℎ
Io(t) The inventory level at the OW at time ‘t’ of is given as

$̃
retailer
Ir(t) The inventory level at the RW at time ‘t’ of Shortage cost per unit time
retailer ($/unit/unit time) which is imprecise

$̃ = $ , $ , $ , $
S(t) The shortage level at the retailer ends in nature is given as

&'
Production rate
Unit manufacturing cost Shortage cost for lost sales per unit
= ⊕ ⊕ ⨁ ⨂ time ($/unit/unit time) which is

&' = & , & , & , &

imprecise in nature is given as
is the cost component includes the raw
(
material cost which is imprecise in
(
The order quantity of the retailer
= , , ,
nature is given as
The order quantity of the wholesaler
# The time at which the inventory level at
is the cost of labor, energy etc. which is the own warehouse (OW) reaches
= , , ,
imprecise in nature is given as zero
! The time at which the inventory level at
is the cost of tool, die etc. which is the rented warehouse (RW) reaches

= , , ,
imprecise in nature is given as
)
zero

)
The inventory period for the retailer

*
Setup cost per production run for the The inventory period for the wholesaler
manufacturer which is imprecise in nature is Inflation rate

= , , ,
given as 3. Formulation of Crisp Integrated Inventory
Model
The replenishment cost per order for the In this supply chain system, we assume that

= , , ,
retailer which is imprecise in nature is given as wholesaler and retailer worked as single entity and
plays the role of leader in this supply chain system as
The replenishment cost per order for the they have to satisfy the demand of customer. Here,
wholesaler which is imprecise in nature is wholesaler place the order of Qw units to the
manufacturer and these units shipped to the retailer in k
= , , ,
given as
shipment of equal size of QR. On bases of optimal

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International Journal of Pure and Applied Mathematics Special Issue

policy adopted by wholesaler and retailer, manufacturer other is that the finished product piles up at the rate of
finds the optimal production rate so that its total .
inventory cost is minimum.
Follower Leader

Rented
Warehouse

Manufacturing Unit Wholesalers Unit Retailer’s Customer

Unit Demand

Own
Warehouse

Many inventory models have been developed Therefore, the differential equation for raw material
for the static environment where the demand rate is inventory level representing above system during
assumed to be constant. However, it is observed that in t1 is as follows.
,-. /
real situations, constant demand can be applicable only
,/
=− , 0≤ ≤ (1)
0 = (+ and =0
for the maturity phase of the product. Many products,
such as fashion accessories, clothes, mobile phones, With boundary condition
need to prove their worth before they are generally On solving the above differential equation with the help

= (+ − , 0≤ ≤
accepted. Hence, it is reasonable to approximate the of boundary condition, we get

= 0, we get
demand for a product to be represented by a time (2)
Using the condition
3
= 4
dependent function during its growth stage. However,
in a realistic product life cycle, demand is increasing (3)
/
with time during the growth phase. In the present Holding cost for raw material = ℎ! 59 8 6 7!/ :
/
ℎ! 59 8 (+ − 6 7!/ :
section the crisp inventory model with linearly
increasing demand is developed in which inventory is =
;< 34 = !3
depleted not only by demand but also by deterioration. = 1− 4
Shortages are allowed and partially backlogged.
Similarly, holding cost for the finished product
; 3 = !3
= ? 4 1− 4
3.1 Formulation of Inventory Model for
Manufacturer
Inventory Manufacturing cost of (+ units
/ @ 3 = !3
= 59 8 (+ 6 7!/ : = 4
1− 4
Setup cost for the manufacturer per setup =
Therefore, the manufacturer’s total inventory cost is the
sum of holding cost of raw material and finished
product, manufacturing cost and setup cost.
(+
Total inventory cost
A; B; C3 = !3 @ 3 = !3
= < ? 4 1− 4 + 4
1− 4 +
Hence, the inventory cost of manufacturer per unit time
is
A;< B;?C34 !34 !34
Time ) E@ = 1− + (+ 1 − +
F.
34
Fig.1 Manufacturer’s Inventory Level (4)
In this model, production system is considered. 3.2 Formulation of Inventory Model for Wholesaler

order lot size (+ with production rate . Here, two

Production process starts with the raw materials of
different processes go simultaneously. One the
inventory level of raw material decreases with
production rate and it reaches to zero at time t1 and
Now for the wholesaler, the ordering quantity
is equal to the inventory needed for the ‘k’ periods at
the retailer ends and the amount inventory which
deteriorates during the wholesaler’s inventory cycle.
During the kth interval of wholesaler there is no

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International Journal of Pure and Applied Mathematics Special Issue

inventory and after receiving Qw of the product at the Now, we calculate the different cost associated with the
end of T2, QR quantity is sent to the retailer. Therefore wholesaler.

E = + (
there is no deterioration during the kth interval of the The purchasing cost of the wholesaler is
wholesaler. Now, the order quantity of the wholesaler
is Inventory carrying cost for the ith interval is
UN
QW=kQR+ Deteriorated units during the wholesaler’s ℎ+ 5 U7= N + 6 7!/ : =
=
V W<XY= AV Z[< Y= 7 C
ℎ+ ( ∑MSTUB 6
inventory cycle (5)
M7S KN=
KB!
Inventory Level of Wholesaler
Hence, carrying cost during one cycle time of the
wholesaler
AV Z[< Y= 7 C
EE = ℎ+ ( ∑M7
UT ∑STUB 6
M M7S KN=
6 7!UN=
QR
KB!
EE =
;4 3\ AV Z[< Y= 7 CV ]ZY= 7V W ]W8 Z[< Y=
QW KB! 7V WZY=
^6 7 !B K N= 7V W Z[< Y= −
7V W ]W8 <Y=
6 7 !BMK N=
QR 7V W<Y=
Now, we calculate the total amount which is
deteriorated during the cycle time of the wholesaler.
Time Period Deteriorated
T1 Items

( 6 KN= − 1
[(k-1)T2, kT2] 0

( 6 KN= − 1 1 + 6 KN=
[(k-2)T2,(k-1)T2]
Time2]
( 6 − 1 1 + 6 KN= + 6 KN=
T2 [(k-3)T2,(k-2)T
KN=
(k-2)T1 (k-1)T1
Fig.2 Graphical representation of Inventory System [(k-4)T2,(k-3)T2]
of Wholesaler ……….. …………………
It is obvious that one inventory period in the
( 6 KN= − 1 ∑MSTUB 6 M7S KN=
……….. …………………
wholesaler consists of ‘k’ retailer’s inventory period. [(i-1)T2,iT2]
Inventory level of the wholesaler is illustrated with the
_E =
Thus the deterioration cost for the wholesaler is
help of Fig.2. From the time (k-2)T2 to (k-1)T2 the
KAV Z[< Y= 7 C
+( ∑M7
UT ∑STUB 6
M M7S KN=
6 7!UN=
inventory level drops by QR and the number of units
KB!
which is deteriorated during the interval [(k-2)T2, (k-
1)T2]. During this interval the inventory level of the _E =
`4 3\ K AV Z[< Y= 7 CV ]ZY= 7V W ]W8 Z[< Y=
^6 7 !B K N= 7V W Z[< Y= −
wholesaler is represented by the following differential
equation: KB! 7V WZY=
,-G /
,/
= −H , I−2 ) ≤ ≤ I−1 ) (6) 7V W ]W8 <Y=
6 7 !BMK N= 7V W<Y=
Inventory level at the wholesaler at (k-1)T1 is QR. Thus Thus wholesaler’s order quantity
V ]ZY= 7 V ]ZY= 7
= ( 6 K[ M7 N= 7/] , I − 2 ) ≤ ≤ I − 1 ) =I( + ( V ZY= 7 − I = ( V ZY= 7
the inventory level for the period [(k-2)T2, (k-1)T2] is
(11)
(7) Thus total inventory cost of the wholesaler is the sum

I−2 ) .
Using this expression we can get the inventory level at of the purchasing cost, carrying cost and deterioration

[ I − 2 ) ] = ( 6 KN=
cost.

During the [ I − 3 ) , I − 2 ) ] interval the + ( +

(8) Total inventory cost of wholesaler
=
;4 3\ AV Z[< Y= 7 CV ]ZY= 7V W ]W8 Z[< Y=
inventory level of the wholesaler is represented by the
KB! 7V WZY=
^6 7 !B K N= 7V W Z[< Y= −
7V W ]W8 <Y=
6 7 !BMK N= 7V W<Y= a
following differential equation:
,-G /
,/
= −H , I−3 ) ≤ ≤ I−2 )
Subject to the condition that [ I − 2 ) ] = ( 6 KN= ` 3 K AV Z[< Y= 7 CV ]ZY= 7V W ]W8 Z[< Y=
+ 4KB!\ 7V WZY=
^6 7 !B K N= 7V W Z[< Y= −
On solving above equation by using the condition we
7V W ]W8 <Y=
6 7 !BMK N= 7V W<Y=
= ( 1 + 6 KN= 6 K[ M7 N= 7/] , I − 3 ) ≤ ≤
get

I−2 )
Hence, total inventory cost of wholesaler per unit time
(9)
1 ℎ+ ( A6 KB! N= − 1C6 MKN= c
is
Thus the inventory of wholesaler during the ith interval
)E = b + ( +
= ( A∑MSTUB 6 M7S KN= C6 K[UN= 7/] ) H + * 1 − 6 7KN=
can be written as follows:
(10)

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International Journal of Pure and Applied Mathematics Special Issue

67 !B K N=
A1 − 6 7 M7 KB! N=
C c
d −
During the period of [0,tr], inventory level of OW is
1 − 6 7 KB! N= depleted due to deterioration only.
During this period inventory system of retailer can be
cV 7V W ]W8 <Y= C
W <[]Z Y= A
a+
represented by the following differential equation:
,-l /
7V W<Y=
,/
= −m # , 0≤t≤tr (15)
c Subject to the condition that # 0 = n
Z[< Y= 7
`4 3\ K AV CV ]ZY= !B K N= 7V
^6 7
W ]W8 Z[< Y=

KB! 7V WZY= 7V W Z[< Y=

c 7 !BMK N= 7V
−6
W ]W8 <Y
ae
On solving equation (15) by using above condition, we
=

= n6 7o/ , 0≤t≤tr
7V W<Y=
get
(12) # (16)
After tr, inventory level of RW is zero so, after that
3.3 Mathematical Formulation of Inventory Model
demand of the customer is satisfied from the OW.
of Retailer
Inventory level of OW during [tr,to] is depleted due to
Retailer used both houses i.e., own warehouse
and rented warehouse to store the ordered quantity(! .
demand and deterioration. This situation can be
described by differential equation as follows:
,-l /
= − f + g − m # , tr≤t≤to
Retailer decided to fulfill the demand of the customer
,/
(17)
Subject to the condition that # # = 0
form the rented warehouse first and after that demand is
fulfilled by own warehouse. Therefore inventory at the
RW is depleted due to demand and due to the On solving equation (17) by using the above condition
deterioration. Graphical representation of the retailer is
# = o = j fm − g A6 o /l7/ − 1C + gmA ! 6 o /l 7/ −
k, tr ≤t≤to
inventory level is presented in Fig. 3.
The change in the inventory level at the RW (18)
can be represented by the following differential During [to, T1] system is out of stock situation. In this
equation. period demand is partially backlogged. During this
,-< /
= − f + g − h ! , 0≤t≤tr
inventory level can be represented by the following
,/
(13)
Subject to the condition that ! ! = 0
differential equation
,-l / pBq/
=−
,/ Br N8 7/
, to≤t≤T1 (19)
Subject to the condition that # # = 0
On solving equation (13) by using above condition we
get
! = i= j fh − g A6 i /<7/ − 1C + ghA ! 6 i /<7/ − On solving the differential equation (19) by using the

k, 0≤t≤tr
above condition, we get
s
q pB BqN8 Br N8 7/
= −r − − uvw ,
(14)
t
# # r Br N8 7/l
Inventory to≤t≤T1 (20)
Level For continuity, inventory level given by equation (16)
and (18) must be same at t=tr i.e.,
n6 7o/< = o= j fm − g A6 o /l 7/< − 1C +
gmA ! 6 o /l 7/< − ! Ck
Which gives
o= V Wxy< Bqo/< Bpo7q
# = ! + o uvw po7qBqo/<
(21)
RW Order Quantity
Above expression shows that # is the function of ! .
Total ordering quantity of the retailer is sum of the
initial inventory level of RW, OW and the total

(! = ! 0 + # 0 + z )
OW backlogged quantity. Thus
W

(! = i= j fh − g A6 i/< − 1C + gh ! 6 i/< k + n +
T1
s
q pB BqN8
tr to Backlogged
r
) − # + t
r
uvw Br N8 7/l
(22)
Demand
Above expression shows that order quantity is the
function of ! and T1.

E = AR+pRQR
Purchasing cost of retailer

Fig.3 Graphical representation of Inventory Holding cost = Holding cost at the OW+ Holding cost
at the RW
/
{E = ℎ! 59 < ! 6 7!/ : +
System of Retailer
/ /
ℎ# 59 < # 6 7!/ : + ℎ# 5/ l # 6 7!/ :
<

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International Journal of Pure and Applied Mathematics Special Issue

/
=ℎ! 59 < |i= j fh − g A6 i /< 7/
− 1C + c|1 + c 1 + ‡) r! = N8 B!= 7 !r
}c uvw 1 + ‡ ) −
r r=
ghA ! 6 i /< 7/
− Ck} 6 7!/
: + }…†
#
/< /
ℎ# 59 n6 6 : +
7o/ 7!/
ℎ# 5/ l |o= j fm −
<

g A6 − 1C + gmA ! 6 o − Ck} 6 7!/ :

The total lost sale cost is given by
o /l 7/ /l 7/ N
ˆzE = & 5/ 8 1 − Br N8 7/
f + g 6 7!/ :
l
;< V •y< /<=
= ~fh − g |* i= − − i= − 1 − * ! i + ^p!7qB
s<
BrN8 a
i=
ˆzE = & ‰Šf − ‹ ) − +
t
r #
! + i } + gh |* i= − • − i=
V •y< /< /<€ /< V •y<
− 1−
s<
q7p!7
c ) − −
q!
) − +
}‚ +
/< /<= /< V •y< ;l
* ! + + ~1 − 1 − * ! 6 7o/< −
t
# #
i i o s<
!
1 − 6 7o/< k +
^p!7qB BrN8 a
o
c Œf + 1 + ‡) t
• uvw 1 + ‡ ) −
r r
;l
o=
ƒ fm − g „− 1 − * # o + # + 1 −
Ž
+ ! a + * o= − l −c
V x yl Wy< /=
* ! ^ o #

*c ^
V x yl Wy< /= / /=
− < a… + gm „− 1 − * # < + l +
Total inventory cost of the retailer is the sum of
o= o

+ < ac +
purchasing cost, holding cost, deterioration cost,
/ V x yl Wy< /=
1−* ! ^ < backordering cost
;
o
Total inventory cost of Retailer = AR+pRQR+ i<= ~ fh −
c* /< − /l − * ^/< V l < − /< a…e
€ x y Wy €

/<=
V •y< V •y<
o= • o= •
g |* i=
− i=
− − 1−* ! i+ ! + i } +
/< /€ / V •y< / /=
Deterioration cost = Deterioration cost at the OW+
Deterioration cost at the RW gh |* i=
− •< − <i= − 1 − * ! i< + < +
`\ V •y< /<=
_E = ~ fh − g |* − = − −
}‚
/< V •y< ; !
i i i=
i
+ lo ~1 − 1 − * ! 6 7o/< − o 1 − 6 7o/< ‚+
+ ! + i } + gh |* i= − •< −
V •y< /< /€
1−* ;l c
! i
o=
~ fm − g |− 1 − * # o
+ #
}‚ +
/< V •y< / /= / V •y<
− 1−* ! <+ < + < + 1−* ! ^ o
V x yl Wy<
+ ! a + * o= − l −
/=
i= i i
!
n ~1 − 1 − * ! 6 7o/< − o 1 − 6 7o/< ‚ + c* ^V l < − /< a… + gm
x y Wy =

`\ o=
ƒ fm − g „− 1 − * + + 1−
+ < ac +
# # / /= / V x yl Wy< /=
o o „− 1 − * # o< + l + 1 − * ! ^ < o
−c
V x yl Wy< /l=
* ^ + !a +* −
! c* /< − /l − * ^/<V l < − /< a…e +
€ x y Wy €
o o=
c* ^ V x yl Wy< /<= /< /l= o= • o= •
− a… + gm „− 1 − * # + + `\ /= V •y<
o= o ~ fh − g |* i= − < − i= − 1 − * ! i +
+ ac +
/< V x yl Wy< /<= i
1−* ^
! + i } + gh |* i= − • − i=
V •y< /< /<€ /< V •y<
− 1−
! o
c* /<
−
/l€
−*^
/< V x yl Wy< /€
− •< a…e
+ i }‚ + n ~1 − 1 −
/< /<= /< V •y<
o= • o= * ! i+
!
* ! 6 7o/<
− 1 − 6 7o/< k +
Demand during the shortage period is partially
backlogged. o
`\
The total backordering cost is given by
N
ƒ fm − g „− 1 − * # o + # + 1 −
zE = $ 5/ 8 − # 6 7!/ : o

+ ! a + * o= − l −c
V x yl Wy< /=
* ! ^ o
l
zE =
*c ^ o= − < a… + gm „− 1 − * # o< + l +
s
N q pB BqN8 Br N8 7/ V x yl Wy< /= / /=
$ 5/ 8 br − # + t
r
uvw Br N8 7/l
† 6 7!/ :
l

+ < ac +
/ V x yl Wy< /=
zE = $ ~ ) − # | 1+
!/l
) + # − 1−* ! ^ <
o
prBq BrN8 c
*c
!
) + # + ) # − #} +
/< /€ / V x yl Wy< /€
r=
− l −*^ < = − < a…e +
o= • o •
7!N8 = c Br N8 7/l
| !
uvw 1 + ‡ ) − # + !
| ) − $~ ) − # | 1+
!/l
) + # − ) + #+
!

+c
!= r ! prBq BrN8 c
# r=
1 + ‡) − − r = ) # − #} + r=

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International Journal of Pure and Applied Mathematics Special Issue

|
7!N8 = c
uvw 1 + ‡ ) − +
Br N8 7/l
| ) − 1c ‡* ) + * − 2*‡ c
# •1 + c 1 + ‡) d •‘ uvw 1 + ‡ )
‡ ‡
! !
+c
!= r !
# 1 + ‡) − −
r= r=
1c ‡* ) + * − 2*‡ c − ‘•Ž +
•1 + c 1 + ‡) d
#
•‘ uvw 1 + ‡ )
‡ ‡ s<
^p!7qB BrN8 a s<
& ‰Šf −
t
‹ ) − +
q7p!7
t c ) −
− # ‘•Ž + r #

q!
^p!7qB
s<
BrN8 a s< # − ) − # +
& ‰Šf −
t
‹ ) − # +
q7p!7 t
c ) − ^p!7qB
s<
BrN8 a
r c Œf + 1 + ‡) t
• uvw 1 + ‡ ) −
q! r r
# − ) − # +
s<
Ž–
^p!7qB BrN8 a
c Œf + 1 + ‡) t
• uvw 1 + ‡ ) − #
r r
(23)

Ž
3.4 Mathematical Formulation of Integrated System
# (Leader-Follower Approach)
In this situation, wholesaler and retailer jointly

) E = [A“ + p“ Q “ c + < ~ fh − g |*
Hence, total inventory cost of retailer per unit time is
; /=
− <−
determined the optimal policy and on the bases of that
N8 i= i=
manufacturer decide the optimal strategies. Thus,

− 1 − * ! i + ! + i } + gh |* i<= − •< −
V •y< V •y< / /€
Objective function of integrated system in crisp
i=
Minimum TIC ! , ) , k
environment is
− 1 − * ! i< + < + < i }‚ +
/< V •y< / /= / V •y<
i= Subject to ! , ) ≥ 0, k is an integer.
Where ) E = ) E + ) E
(23)
;l !
~1 − 1 − * ! 6 7o/< − o 1 − 6 7o/< ‚ +
o Value of ) E is given in equation (12) whereas the
~ fm − g |− 1 − * # o + # c
;l
o= values of ) E is given in equation (23).
V x yl Wy< /=
+ 1−* ! ^ o + ! a + * o= − l −
Objective function of the manufacturer in crisp

c* ^V l < − /< a… + gm Minimum ) E@

environment is
x y Wy =

o= Subject to > 0
+ < ac + Where the value of ) E@ is given in equation (4).
/ /= / V x yl Wy< /=
(24)
„− 1 − * # o< + l + 1 − * ! ^ < o
c* /< − /l − * ^/< V l < − /< a…e
€ x y Wy €

o= • o= •
4. Formulation of Fuzzy Inventory Model for
`\ /= V •y<
~ fh − g |* i= − < − i= − 1 − * ! i +
Integrated System
i
In this section, fuzzification and defuzzification of the

! + i } + gh |* i= − • − i=
V •y< /< /<€ /< V •y<
− 1−
objective has been performed.
Fuzzification by Trapezoidal Fuzzy Numbers:
* ! i< + < + < i }‚ + n ~1 − 1 −
/ / = / V •y < In the present scenario, it is very difficult to
!
* ! 6 7o/< − o 1 − 6 7o/< k +
determine precise value of different costs associated
with inventory system. So, it is more reasonable to
`\
ƒ fm − g „− 1 − * # + # + 1−
describe it as fuzzy in nature. Therefore, all the cost
o o parameters are considered as fuzzy variables. Suppose
−c
V x yl Wy< /l=
* ^ + !a +* −
the different cost represented as following by using the
! o o=
= , , ,
trapezoidal fuzzy number.
c* ^ V x yl Wy< /<=
− a… + gm „− 1 − *
/<
+
/l=
+
= , , ,
#
,
o= o

+ ac + = , , ,
/< V x yl Wy< /<=
1−* ^
,
! o
= , , ,
,

c* /<
−
/l€
−*^
/< V x yl Wy< /€
− •< a…e + ℎ# = ℎ# , ℎ# , ℎ# , ℎ# ,
,
o= • o=
!/l ! ℎ = ℎ ,ℎ ,ℎ ,ℎ ,
$~ ) − | 1+ ) + − ) + +
# # #
ℎ = ℎ ,ℎ ,ℎ ,ℎ
) # − #} +
prBq BrN8 c $̃ = $ , $ , $ , $ ,
,
r=
7!N8 = c Br N8 7/l &' = & , & , & , &
| !
uvw 1 + ‡ ) − # + !
| ) −
+c
!= r !
# r=
1 + ‡) − − r=

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International Journal of Pure and Applied Mathematics Special Issue

= , , , |
7!N8 = c
uvw 1 + ‡ ) − +
Br N87/l
| ) −
#
ℎ! = ℎ! , ℎ! , ℎ! , ℎ! ,
,
! !
+c
!= r !
ℎ" = ℎ" , ℎ" , ℎ" , ℎ" , # 1 + ‡) − − =
r= r
= , , , 1c ‡* ) + * − 2*‡ c
•1 + c 1 + ‡) d •‘ uvw 1 + ‡ )
= , , , ‡ ‡
,

= , , ,
,

Thus the objective function wholesaler and retailer − # ‘•Ž ⨁

which we have to minimized can be constructed under
s<
^p!7qB BrN8 a
&' ⊗ ‰Šf − ‹ ) − +
t
)E=
fuzzy framework as follows:
r #

ƒ ⨁ ⊗ ( ⨁ℎ ⊗ s<
N= + q7p!7
t c ) − # −
q!
) − # +
3\ AV Z[< Y= 7 CV ]ZY= c V W <[=Z Y= A 7V W ]W8 Z[< Y= C
^ −c ^p!7qB
s<
BrN8 a
KB! 7V WZY= 7V W Z[< Y= c Œf + 1 + ‡) t
• uvw 1 + ‡ ) −
r r
c
V W <[]Z Y= A 7V W ]W8 <Y= C

7V W<Y=
a⨁ + ⊗
Ž–
3\ K AV Z[< Y= 7 CV ]ZY= 7 !B K N= 7V c #
W ]W8 Z[< Y=

KB! 7V WZY =
^6 7V W Z[< Y=
Now, the objective function of manufacturer which we
c−6 7 !BMK N= 7V
ae ⨁ N jA“ ⨁p“ ⊗ Q “ c⨁ℎ! ⊗
W ]W8 <Y=
have to minimized can be constructed under fuzzy
7V W<Y= 8

) E@ =
framework as follows:
/<= V •y<
i=
~ fh − g |* i= − − i= − 1 − * ! i +
!3 3 3
Aℎ! ⨁ℎ" C ⊗ 1 − 4 4 ⨁ ⊗ 4 1−
! + i } + gh |* i= − • − i=
V •y< /< /<€ /< V •y<
− 1− !34 3
⨁ ⊗ 4
* ! i< + < + < i }‚ ⨁ℎ# ⊗ o ~1 − 1 −
/ / = / V •y <

Minimum ) E ! , ) , k
Now, the problem is
!
* ! 6 7o/< − 1 − 6 7o/< k⨁ℎ# ⊗ = ~ fm −
o o Subject to ! , ) ≥ 0, k is an integer.
g |− 1 − * + c
(25)
# o # Objective function of the manufacturer in crisp
V x yl Wy< /l=
+ 1−* ^ + !a + * − −
Minimum ) E@
environment is
! o o=
c* ^ V x yl Wy< /<=
− a… + gm Subject to > 0 (26)
o=

+ < ac +
/< /l= /< V x yl Wy< /
„− 1 − * + + 1−* ^
=
Defuzzification by Modified Graded Mean
# !
o o
If f' = f , f , f , f be a trapezoidal fuzzy number
Integration:-

c* /<
−
/l€
−*^
/< V x yl Wy< /€
− •< a…e ⨁
o= • o=
then using formula given in Mahata and Mahata
/<= V •y<
⊗ ~ fh − g |* − − − 1− representation of f' is given by
(2011), the modified graded mean integration
i i= i=
£p B £p= B 7£ p€ B 7£ p¤
* +
V •y<
} + gh |*
+
/< / / V •y<
− •< − <i=
€
− P(f')= 8
! i ! i i= £N-¥8 B £N-¥= B 7£ N-¥€ B 7£ N-¥¤
Thus, P() E )=
+ < + < i }‚ ⨁ ⊗
/< / / V •y<
1−* n ~1 −
=
! i
!
1−* ! 6
7o/<
− o 1 − 6 7o/< k⨁ 1
Where
) EU = b + U(
⊗ o ƒ fm − g „− 1 − * + + ) U
# #
o
ℎ+U ( A6 KB! N= − 1C6 MKN= c
+
+ ! a + * = − l −c
V x yl Wy< /=
1−* ! ^ H + * 1 − 6 7KN=
o o
c* ^V l < − /< a… + gm „− 1 − * # /< + /l +
x y Wy = = 67 !B K N=
A1 − 6 7 M7 KB! N= C c
d −
o= o 1 − 6 7 KB! N=
+ < ac +
/ V x yl Wy< /=
1−* ! ^ < o
cV 7V W ]W8 <Y= C
W <[]Z Y= A

c* /< − /l − * ^/< V l < − /< a…e ⨁

€ x y Wy €
7V W<Y=
a+
o= • o= •
^6 7 !B K N= 7V W Z[< Y= c
`4X 3\ K AV Z[< Y= 7 CV ]ZY= 7V W ]W8 Z[< Y=
!/ !
$̃ ⊗ ~ ) − # | 1 + l ) + # − ) + # + KB! 7V WZY=
prBq BrN8 c
) # − #} +
r=

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International Journal of Pure and Applied Mathematics Special Issue

c−6 7
§N-¥¨8 B §N-¥¨= B 7§ N-¥¨€ B 7§ N-¥¨¤
!BMK N= 7V
ae+N [A“¦ + And P() E@ )=
W ]W8 <Y=

7V W<Y= 8

p“¦ Q “ c + i<X=
; Where
A;<X B;?X C34 !34 34 !34
/<= V •y<
) E@U = 1− + 1− U +
~ fh − g |* − − i= − 1 −* + + ©X F.X 34
i= ! i !
+ U +
} + gh |* <= −
V •y< / /<€ / V •y< /
− <i = − 1 − * ! i< +
,
i i •
where i=1,2,3,4
}‚ + l ~1 − 1 − * ! 6 7o/< −
/<= / V •y< ;
+ < Minimum P() E ! , ) , k
Now, problem is
i o
! ;lX Subject to ! , ) ≥ 0, k is an integer and and 0 ≤ ϑ ≤
1−6 7o/<
k+ ƒ fm − g „− 1 − * # o +
o o= 1
# + 1−* ! ^
V x yl Wy< /=
+ ! a + * o= − l − Minimum P ) E@
o
Subject to > 0 and 0 ≤ ζ ≤ 1
*c ^ o= − < a…c
V x yl Wy< /=
5. Solution Procedure
/ /= / V x ylWy<
+gm „− 1 − * # < + l + 1 − * ! ^ < +
To derive the optimal solutions for wholesaler and
o o
retailer, the following classical optimization technique
/<= c
Step-1: Take the partial derivatives of P() E )with
can be used.

+ c*
/<
−
/l€
− *^
/< V x yl Wy< /€
− •< a…e respect to ! and ) and equating the
o= • o=
`\ /= V •y<
~ fh − g |* i= − < − i= − 1 − * ! i +
results to zero. The necessary conditions for
i
optimality are
®¯ N¥ ®¯ N¥
= 0, =0
! + i } + gh |* i= − • − i=
V •y< /< /<€ /< V •y<
− 1− ®°± ®²8

+ i }‚ + U n ~1 − 1 − solved for !∗ f´: ) ∗ .

/< /<= /< V •y<
* ! i+
Step-2: The above simultaneous equations can be

! Step-3: With !∗ f´: ) ∗ found in step 2, derive P

* ! 6 7o/< − o 1 − 6 7o/< k +
() E !∗ , ) ∗ ).
`\X
ƒ fm − g „− 1 − * # + # + 1−
o o
Step-4: Sufficient condition for the optimality of

+ ! a + * = − l −c
V x yl Wy< /=
* ! ^
integrated cost of wholesaler and retailer
o o
∂ P )E ∂ P )E
is
c* ^V l < − /< a… + gm „− 1 − * # /< + /l + > 0, >0
x y Wy = =

o= o ∂t ¶ ∂T
+ < ac +
/ V x yl Wy< /=
1−* ! ^ < o
®= ¯ N¥ ®= ¯ N¥ ®=¯ N¥
− >0
*c o<= − •l − * ^ < o=
/ /€ / V x yl Wy< /€
− •< a…e + ®°± = ®²8= ®°± ®²8
And

!/ !
$U ~ ) − # | 1 + l ) + # − ) + # +
Step-5: To derive the optimal value of k we use the

A) E !∗ , ) ∗ , I − 1 C ≤ A) E !∗ , ) ∗ , I C
following condition:
prBq BrN8 c
) # − #} +
7!N8 c
r=
Br N8 7/l
≤ A) E !∗ , ) ∗ , I + 1 C
| uvw 1 + ‡ ) − # + | ) −
=

! ! Now, to derive the optimal solutions for manufacturer,

1 + ‡) − − r = +c
! = r !
#
the following classical optimization technique can be
r=
c|1 + c 1 + ‡) r! N8 B! 7 !r }c uvw 1 + ‡ ) − Step-1: First we put the optimal value of ( in the
= =
used.
r r=
expression of ) E@
}…† + Step-2: Find the first derivative of ) E@
.
# with
s<
^p!7qB BrN8 a s<
c ) −
respect to P.
q7p!7
&U ‰Šf − ‹ ) − +
t t
:) E@
#
Step-3: Necessary condition for optimality is
r
=0
# −
q!
) − # + :
s<
∗
Step-4: On solving above equation, we get the value of
^p!7qB BrN8 a
c Œf + 1 + ‡) t
• uvw 1 + ‡ ) −
.
r r Step-5: Sufficient condition for the minimization of

: ) E@
cost function is
# Ž– >0
:
Where i=1, 2, 3, 4

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International Journal of Pure and Applied Mathematics Special Issue

6. Numerical Analysis:- 6.1 Sensitive Analysis w.r.t Deterioration Rate:-

ABC Company consists of one retailer and one
wholesaler dealing with farming industry. Company
purchases the product form farmer who worked as
manufacturer. Here, retailer has two warehouses one is
known as own warehouse and other is rented
warehouse. The capacity of own warehouse is 200
units, deterioration rate in OW, α=8%, deterioration
rate in RW, β=5%, deterioration rate for wholesaler
Effect of deterioration on wholesaler and retailer is
tabulated in Table-1. Fig.4 and Fig.5 shows the effect
of deterioration rate on the inventory cost of wholesaler
and retailer. On increasing the value of α, wholesaler
cost decreases whereas in other cases all are positively
correlated. It is observed that wholesaler inventory cost
is highly sensitive with respect to γ whereas least
sensitive with respect to α and inventory cost of retailer

retailer A C and wholesaler A Cis about 1500 and

ends, γ=3%. The fuzzy replenishment cost of the is highly sensitive with respect β and not effected by γ.
Table-1:- Effect of deterioration rate on
wholesaler’s and retailer’s inventory cost
manufacturerA @ C is about 200. The fuzzy purchasing
2500 respectively and fuzzy setup cost for
% change % change in % change in % change in
in inventory cost w.r.t inventory cost w.r.t inventory cost w.r.t γ

and 3.5 respectively. Fuzzy raw material cost A C is

deterioration α β
cost of the retailer and wholesaler is about 8 rate

about 20, fuzzy labor cost A C is about 2400 and fuzzy

For For For For For For

energy cost A C is about 0.01. The fuzzy holding cost

wholesaler Retailer wholesaler Retailer wholesaler Retailer
-50 1.57 -1.12 -5.4 -1.96 -28.01 0

of the own warehouseAℎ# C, rented ware house Aℎ C,

-25 0.75 -0.54 -2.73 -0.99 -16.00 0

wholesaler Aℎ C, for raw products Aℎ! C and finished

25 -0.69 0.5 2.81 1.02 19.98 0
50 -1.33 0.96 5.7 2.07 44.99 0

items Aℎ" C are about 0.4, 0.5, 0.3, 2.5 and 3.0
respectively. The fuzzy shortage cost $̃ per unit item
Fig.4 Effect of Deterioration Rate on Wholesaler Inventory

is greater or less than 4 and fuzzy lost sale cost &' is

Cost

50
greater or less than 20. Now, the objective is to
% Change in Inventory

determine to, T1 and k so that the total integrated Effect of α

inventory cost of wholesaler and retailer is minimum 0
Effect of β
Cost

and value of P so that the manufacturer inventory cost -50 -25 25 50

Effect of γ
is minimum. -50
% Change
Here we use a general rule to transfer the
linguistic data, “greater or less than X” and “about X”,
into trapezoidal fuzzy numbers as Fig.5 Effect of Deterioration Rate on Retailer
“greater or less than X” = (0.9X, 0.95X, 0.95X, Inventory Cost
1.1X),
3
“about X” = (0.95X, X, X, 1.1X).
% Change in Inventory Cost

By the above rule, the fuzzy parameters in this example 2

= 1425, 1500, 1500, 1650 ,

can be transferred as follows: 1 Effect of α

= 2375,2500, 2500,2750 , = 7.6, 8, 8, 8.8

0
Effect of β

+ = 3.33, 3.5, 3.5, 3.85 ,

-1 -50 -25 25 50

ℎ# = 0.38, 0.4, 0.4, 0.44 , ℎ = 0.48, 0.5, 0.5, 0.55

Effect of γ
-2

ℎ+ = 0.29, 0.3, 0.3, 0.33 ,

-3

$̃ = 3.6, 3.8, 3.8, 4.4 , &' = 18, 19,19, 22

% Change

= 190, 200, 200,220 ,

ℎ! = 2.375, 2.5,2.5,2.75 , ℎ" = 2.85, 3,3,3.3 ,
So, we can conclude that while making the inventory
policy for wholesaler and retailer special focus should
= 19, 20,20,22 , = 2280, 2400,2400,2640 , given to control the value of γ. By doing so total
= 0.0095, 0.01,0.01,0.011 inventory cost of the integrated system reduces.
In addition to above, following parameters are 6.2 Sensitive Analysis w.r.t Inflation Rate:-
also considered: Effect of inflation on wholesaler, retailer and on supply
chain is tabulated in Table-2. Fig.6 shows the effect of
a = 400, b = 0.05, inflation rate (r) = 0.06
inflation on the inventory cost of wholesaler, retailer
Now, we replace the above fuzzy parameters
and supply chain. Inventory cost and inflation are
and other different parameters in the expression of
negatively correlated to each other means as the
objective function and using the above solution process
inflation rate increases inventory cost decreases.
we get the optimal solution of the system as follows.
∗
! )∗ k ∗
9 )∗ (∗ (∗ ∗
)E )E )E ) E@∗

3. 5. 3 3.5 16. 93 500 597 459 1745 634 14620

2 5 8 5 8 3 8 5 1 9

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International Journal of Pure and Applied Mathematics Special Issue

Table-2 Effect of Inflation rate on inventory cost of Fig.7 and Fig.8 shows the effect of retailer’s purchasing
wholesaler, retailer and supply chain cost and wholesaler’s purchasing cost on the inventory
% change % change in % change % change cost of wholesaler, retailer and on supply chain. It is
in wholesaler’s in in observed that wholesaler inventory cost is not affected
Inflation inventory cost retailer’s integrated by the purchasing cost of retailer and retailer inventory
inventory inventory cost is not affected by wholesaler purchasing cost. It is
cost cost observed that retailer and supply chain inventory cost
-50 6.012 9.898 8.98 are positively correlated with purchasing cost. Change
-25 3.011 5.011 4.02 in supply chain cost is almost same regarding the chain
25 -2.989 -4.999 -4.01 in purchasing cost of retailer and wholesaler. As the
50 -5.012 -10.001 -7.99 total cost of the supply chain is affected by the
purchasing cost so the wholesaler and retailer should
Fig.6 Effect of Inflation on Inventory Cost
use discounting model approach for coordination.

20 7. Conclusion:-
Effect on
% Change in Cost

10 Wholesaler In this Paper, an integrated inventory model

consisting wholesaler and retailer for deteriorating
0 Effect on items is presented where retailer has two-warehouse
-10 -50 -25 25 50 Retailer system to store the stock. Whole of the study is carried
-20 Effect on out under the effect of inflation and partial
% Change Supply Chain backordering is considered at retailer’s end. It is
assumed that holding cost at RW is higher as compared
to OW. To obtain the optimal solution of the supply
6.3 Sensitive Analysis w.r.t Purchasing Cost:- chain Leader-Follower approach has been used. This
Effect of purchasing cost of wholesaler and retailer is type of scenario is observed in farming industries
tabulated in Table-3 and graphically it is presented in where farmer worked as follower and the wholesaler
Fig. 7 and Fig.8. and retailer worked as single entity. Demand rate is
Table-3:- Effect of Purchasing Cost on Different taken as linear function of time which is especially
Player of Supply Chain suitable for seasonal products.
% Change % change in inventory % change in inventory The major contribution of the proposed model
in cost w.r.t pr cost w.r.t pw
parameter is the consideration of supply chain, inflation, partial
For For For For For For backordering, volume flexibility and time dependent
wholesaler Retailer supply wholesaler Retailer supply
Chain Chain demand for production-inventory model for a three
-50 0 -13.99 -10.02 -34.03 0 -9.01 echelon supply chain model. Consideration of
-25 0 -7.01 -4.99 -16.97 0 -3.99
25 0 6.89 5.01 16.98 0 4.89
impreciseness in cost parameters increases the
50 0 14.00 10.01 34.01 0 9.99 applicability and practicality of the proposed model. As
lot of models are presented in the literature but we try
to enrich the literature through this work As far as our
Fig.7 Effect of Retailer Purchasing Cost on Inventory
knowledge is concern this type of supply chain model
Inventory Cost

Cost
% Change in

is not published by any researcher.

50
Effect on Through sensitive analysis, we provide the
0 Wholesaler platform to the decision-maker what optimal policy
-50 -25 25 50 Effect on they adopt with respect to the change in different
-50
% Change Retailer inventory parameters. Form sensitive analysis, it
observed that inventory cost is highly sensitive with
respect to γ, inflation, purchasing cost of retailer and
Fig.8 Effect of Wholesaler Purchasing cost on
wholesaler. While making the optimal policy, decision-
% Change in Inventory Cost

Inventory Cost maker should pay special attention on these parameters.

There is ample scope for further extension of the
50 Effect on present research. Applicability of the proposed model
Wholesaler
can be enhancing by conserving imprecise demand rate
0 Effect on and rate of inflation. We can also consider trade credit
-50 -25 25 50 Retailer
and stock dependent demand for better coordination.
-50 Effect on Optimal strategies can be obtained by taking all players
% Change Supply Chain
as single entity.

1492
International Journal of Pure and Applied Mathematics
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