Fuzzy inventory model using penalty cost and shortage cost with finite and infinite production rate

In this paper an inventory model using penalty cost and shortage cost are formulated. The aim of this research work is to minimize the time period, the order quantity and the total cost. The model is developed for both finite and infinite production rate. The demand is considered as constant demand. To achieve this the formulated inventory model is converted to fuzzy inventory model by considering the parameters holding cost, demand, shortage cost and setup cost as trapezoidal fuzzy numbers. To find the value of optimum time period, optimum order quantity and optimum total cost, signed distance method is used for defuzzification. Numerical examples have been given in order to explain the model clearly. Sensitivity analysis is also given.