An Algorithm for Solution of an Interval Valued EOQ Model

Abstract

This paper deals with the problem of determining the economic order quantity (EOQ)in the interval sense. A purchasing inventory model with shortages and lead time, whose carryingcost, shortage cost, setup cost, demand quantity and lead time are considered as interval numbers,instead of real numbers. First, a brief survey of the existing works on comparing and ranking anytwo interval numbers on the real line is presented. A common algorithm for the optimum productionquantity (Economic lot-size) per cycle of a single product (so as to minimize the total average cost) isdeveloped which works well on interval number optimization under consideration. A numerical exampleis presented for better understanding the solution procedure. Finally a sensitive analysis of the optimalsolution with respect to the parameters of the model is examined.

Keywords

• Inventory
• Interval arithmetic
• Interval valued Demand
• Interval lead time
• Interval valued inventory cost parameters