A stochastic multiobjective multiconstraint inventory model under inflationary condition and different inspection scenarios

Abstract

This article presents inspection scenarios for the multiobjective multiconstraint mixed backorder and lost sales inventory model with imperfect items in which the order quantity, reorder point, ordering cost, lead time, and backorder rate are decision variables. The objectives are minimizing expected annual cost and variance of shortages. The number of imperfect items is assumed to be a beta-binomial random variable. There are two inspection scenarios: the imperfect items observed during inspection and screenings are either all reworked or all discarded. In order to fit some real environment, this study assumes the maximum permissible storage space and available budget are limited. Backorder rate is considered as a function of expected shortages at the end of cycle. Stochastic inflationary conditions with a probability density function are also considered in the presented model. This study assumes that the purchasing cost is paid when an order arrives at the beginning of the cycle, and the ordering cost is paid at the time of the order placing. The aggregate demand follows a normal distribution function. Finally, a solution procedure is proposed in order to solve the discussed multiobjective model. In addition, a numerical example is presented to illustrate the multiobjective model and its solution procedure for different inspection scenarios, and a sensitivity analysis is conducted with respect to the important system parameters.