Multi-objective vendor managed inventory system with interval type-2 fuzzy demand and order quantities

Abstract

PurposeThe proposed IT2FMOVMI model intends to concurrently minimize total cost and warehouse space for the single vendor-retailer, multi-item and a consolidated vendor store. Regarding demand and order quantities with the deterministic and type-1 fuzzy numbers, we have also formulated the classic/crisp MOVMI model and type-1 fuzzy MOVMI (T1FMOVMI) model. The suggested solution technique can solve both crisp MOVMI and T1FMOVMI problems. By finding the optimal ordered quantities and backorder levels, the Pareto-fronts are constructed to form the solution sets for the three models.Design/methodology/approachA multi-objective vendor managed inventory (MOVMI) is the most recognized marketing and delivery technique for the service provider and the retail in the supply chain in Industry 4.0. Due to the evolving market conditions, the characteristics of the individual product, the delivery period and the manufacturing costs, the demand rate and order quantity of the MOVMI device are highly unpredictable. In such a scenario, a MOVMI system with a deterministic demand rate and order quantity cannot be designed to estimate the highly unforeseen cost of the problem. This paper introduces a novel interval type-2 fuzzy multi-objective vendor managed inventory (IT2FMOVMI) system, which uses interval type-2 fuzzy numbers (IT2FNs) to represent demand rate and order quantities. As the model is an NP-hard, the well-known meta-heuristic algorithm named NSGA-II (Non-dominated sorted genetic algorithm-II) with EKM (Enhanced Karnink-Mendel) algorithm based solution method has been established.FindingsThe experimental simulations for the five test problems that demonstrated distinct conditions are considered from the real-datasets of SAPCO company. Experimental study concludes that T1FMOVMI and crisp MOVMI schemes are outclassed by IT2FMOVMI model, offering more accurate Pareto-Fronts and efficiency measurement values.Originality/valueUsing fuzzy sets theory, a significant amount of work has been already done in past decades from various points of views to model the MOVMI. However, this is the very first attempt to introduce type-2 fuzzy modelling for the problem to address the realistic implementation of the imprecise parameters.