The most serious problem for the decision-maker is to face the uncertainty of market demand. The total cost is composed of the unit production cost, the shortage cost and the holding cost. If the difference per unit between the shortage cost and the production cost is not larger than the sum of the unit production cost and the unit holding cost, then the production quantity must be less than the most possible value of market demand; otherwise, the production quantity must be more than the most possible value of market demand. The larger the most possible value of market demand (or the shortage cost), the larger the optimal quantity will be; The larger the unit cost or the holding cost, the smaller the optimal quantity will be. The effect of the spread of fuzzy number on the optimal quantity is ambiguous.
Relation:
Journal of Statistics & Management Systems 15(2-3), pp.281-289
