LAUSR

This paper presents a continuous review inventory system in the presence of fuzziness and randomness in demand and cost parameter. In the realistic situations, determination of the stock-out cost is often difficult. Instead of having stock-out cost term in the objective function, a condition on the service level is established on the model. The model is constructed as a fuzzy stochastic optimization problem, and we developed a methodology to obtain the optimal solutions such that total expected annual cost is minimized in the fuzzy sense. A numerical example is included to illustrate the proposed methodology.