### Abstract

Various types of uncertainties and imprecision are inherent in real inventory problems. They are classically modeled using the approaches from the probability theory. However, there are uncertainties that cannot be appropriately treated by usual probabilistic models. The questions how to define inventory optimization tasks in such environment and how to interpret optimal solutions arise. This paper considers the modification of EOQ formula in the presence of imprecisely estimated parameters. For example, holding and ordering costs are often not precisely known and are usually expressed by linguistic terms such as: "Holding cost is approximately of value c_{h}", or: "Ordering cost is about value c_{o} or more". These imprecise parameters are presented by fuzzy numbers, defined on a bounded interval on the axis of real numbers. Alternative approaches to determining the optimal order quantity in a fuzzy environment are developed, illustrated by a selection of examples, and discussed.

Original language | English |
---|---|

Pages (from-to) | 499-504 |

Number of pages | 6 |

Journal | International Journal of Production Economics |

Volume | 45 |

Issue number | 1-3 |

DOIs | |

Publication status | Published - 1 Aug 1996 |

### Fingerprint

### Keywords

- EOQ
- Fuzzy arithmetic
- Fuzzy number
- Imprecision
- Uncertainty

### ASJC Scopus subject areas

- Economics and Econometrics
- Industrial and Manufacturing Engineering

### Cite this

*International Journal of Production Economics*,

*45*(1-3), 499-504. https://doi.org/10.1016/0925-5273(95)00149-2

**EOQ formula when inventory cost is fuzzy.** / Vujošević, Mirko; Petrovic, Dobrila; Petrović, Radivoj.

Research output: Contribution to journal › Article

*International Journal of Production Economics*, vol. 45, no. 1-3, pp. 499-504. https://doi.org/10.1016/0925-5273(95)00149-2

}

TY - JOUR

T1 - EOQ formula when inventory cost is fuzzy

AU - Vujošević, Mirko

AU - Petrovic, Dobrila

AU - Petrović, Radivoj

PY - 1996/8/1

Y1 - 1996/8/1

N2 - Various types of uncertainties and imprecision are inherent in real inventory problems. They are classically modeled using the approaches from the probability theory. However, there are uncertainties that cannot be appropriately treated by usual probabilistic models. The questions how to define inventory optimization tasks in such environment and how to interpret optimal solutions arise. This paper considers the modification of EOQ formula in the presence of imprecisely estimated parameters. For example, holding and ordering costs are often not precisely known and are usually expressed by linguistic terms such as: "Holding cost is approximately of value ch", or: "Ordering cost is about value co or more". These imprecise parameters are presented by fuzzy numbers, defined on a bounded interval on the axis of real numbers. Alternative approaches to determining the optimal order quantity in a fuzzy environment are developed, illustrated by a selection of examples, and discussed.

AB - Various types of uncertainties and imprecision are inherent in real inventory problems. They are classically modeled using the approaches from the probability theory. However, there are uncertainties that cannot be appropriately treated by usual probabilistic models. The questions how to define inventory optimization tasks in such environment and how to interpret optimal solutions arise. This paper considers the modification of EOQ formula in the presence of imprecisely estimated parameters. For example, holding and ordering costs are often not precisely known and are usually expressed by linguistic terms such as: "Holding cost is approximately of value ch", or: "Ordering cost is about value co or more". These imprecise parameters are presented by fuzzy numbers, defined on a bounded interval on the axis of real numbers. Alternative approaches to determining the optimal order quantity in a fuzzy environment are developed, illustrated by a selection of examples, and discussed.

KW - EOQ

KW - Fuzzy arithmetic

KW - Fuzzy number

KW - Imprecision

KW - Uncertainty

U2 - 10.1016/0925-5273(95)00149-2

DO - 10.1016/0925-5273(95)00149-2

M3 - Article

VL - 45

SP - 499

EP - 504

JO - International Journal of Production Economics

JF - International Journal of Production Economics

SN - 0925-5273

IS - 1-3

ER -