A fuzzy random continuous review inventory system

A fuzzy random continuous review system has been presented in this paper with the annual customer demand assumed to be a uniformly distributed continuous fuzzy random variable. Besides the reorder point and the production lot size, the setup cost and the ‘out of control’ probability for a production process have been assumed to be control parameters in the model. Investments to reduce the setup cost and improve the process quality have been incorporated into the total cost in this regard. A methodology has been proposed to minimize this cost and it has been illustrated by way of a numerical example.