Application of Uncertain Programming to an EOQ Model for Imperfect Quality Items

Uncertainty theory has got quite attention after it was pioneered by Baoding Liu in 2007. Uncertainty is the newest area among the concepts to express imprecise quantities which can be expressed by the ambiguity of human language. Such an unpredictable value can be neither accurately described by probability theory nor fuzzy logic. In inventory models, costs are very prominent part of the systems which determines the profit of the organization. There are some external factors by which there is always a chance to fluctuation in costs .Thus, costs can be considered as another form of human uncertainty because it is the organization’s own decision that order will be placed or not; and if orders are placed then how much? In an inventory system, there are alaways some imperfect items exist from lot size due to imperfect production process, natural disasters, damages, or many other reasons. Adopting the Uncertainty theory methodology for inventory models used by Rong, the expected value model and chance-constrained programming model of economic order quantity for imperfect items with Uncertain costs are developed when the all type of the costs are assumed to be uncertain variables. Applying the result from the Liu’s uncertainty theory the models can be transformed into a deterministic form, and finally we get the solution by 99-method. The effectiveness of the proposed models can be explained by numerical example. The paper concludes with Conclusion and scope of future work.