Fuzzy Criterion Decision Processes

Abstract

In the standard inventory theory literature, an inventory problem is usually formulated as an optimization problem using the dynamic programming model framework. As pointed out earlier, the resultant model typically seeks a policy which minimizes the total inventory cost, i.e., the weighted sum of all inventory costs incurred over their respective stages. Recall that we called this criterion economic criterion, and the associated inventory model economic criterion model. Additionally, we stressed that the estimation of cost parameters but most notably, the shortage cost, is usually difficult to realize in practice. Experience shows however, that in many instances, the manager is not necessarily concerned with minimizing the inventory cost or maximizing the economic benefit. Rather, he is usually more interested in operating the inventory system as normally as possible. Thus, it is helpful to develop a new formalism, without cost parameters, to suit the needs of inventory management problems of this genre.