International Journal of Operations Research and Optimization

June 2010, Volume 1, No. 4, pp. 97-106

ISSN-0975-3737
© AACS. All rights reserved.

Website : www.aacsjournals.com

A Multi Item Inventory Model with Machine Breakdown, Flexible

Strategy and Capacity Constraint over Fuzzy Environment
S. R. Singh and Urvashi
Department of Mathematics, D. N. College, Meerut, U.P. (India)
E-mail : urvashi.sehrawat@yahoo.in, shivrajpundir@yahoo.com

ARTICLE INFO ABSTRACT

Article history: This paper investigates a volume flexible inventory
Received 05-10-2009 model with machine breakdown. It is assuming that
Accepted 28-03-2010
there exists an enthusiastic production facility as well as
Key words :
a separate management units for each of the items.
Machine breakdowns resulting idle times of relevant
management units taken into account. Production rates
are treated as volume flexible in nature. We developed
the model with multi item. We considered the demand
rate is triangular fuzzy number and items deteriorate at
constant rate. Optimal production policy is consequent
with minimization of total cost as criterion of optimality.
Numerical illustration of the model is given in the end.
Sensitivity analysis shows the stability of the model.

INTRODUCTION
As is easily observed, all the researches cited here, either considered a constant rate of
production, or they considered production rate to be affected by just one factor. That factor
was taken to be time. A constant production rate has no other advantage, save to make the
study simpler and easy to manipulate. In practical circumstances, it is needless to say that a
constant production rate does not identify with any kind of inventory. In the above models,
the rate of production is assumed to be inflexible. In our study, we have taken a more
realistic production rate which is volume flexible in nature. Volume flexibility is the ability
of the organization to operate at various batch sizes and/or at different production output
levels economically and effectively. It demonstrates the competitive potential of the firm to
98 A multi item inventory model with machine breakdown, flexible ……fuzzy environment

increase production volume to meet rising demand and to keep inventory low as demand
falls .It is widely discussed in economics literature and assessed by the cost curve. If a cost
curve is U-shaped with along flat bottom, it is viewed as flexible because there is a wide
range of production volumes with little difference in costs. The level of aggregate output
over which the firm sustains profitability under normal conditions indicates the range
element of volume flexibility. In this case, range is the number of output levels where the
average cost curve is flat. The time required to change output level captures the mobility
element while production costs and quality levels provide a measure of uniformity. At the
first time Schweitzer and Seidmann (1991) assumed that machine production rates can easily
be changed. Khouja and Mehrez (1994) extended EPLS model to an imperfect production
process with flexible production rate. Sana and Chaudhuri (2004) developed inventory
model with volume flexible production for deteriorating items and shortage. Khouja (2005),
Husseini and Brien (2006), Sana et al. (2007, 2007) also discussed the volume flexibility policy
in production. This whole setup is very practical and can be applied to many commodities in
today’s market. The model conforms to present day economic condition worldwide and is
beneficial for obtaining optimal industrial output.
Maintenance is the major concern of any manufacturing firms. In the competitive business
environment, managers of manufacturing firms encounter the challenge everyday to
produce quality product and to provide better service than before the customers.
Manufacturing infrastructure changed rapidly by technological innovations and scientific
development. Even though the production facilities are becoming sophisticated day by day,
the modern facilities are not free from deterioration due to aging. As a result, machine shift
from ‘in-control’ state to out of control state frequently occur during production runs and
some non- conforming items is produced. Further, the machine shift may result in a machine
breakdown in which case the interrupt lot is usually aborted and then basic EMQ (Economic
Manufacturing Quantity) model loses its usefulness. So, by the practical point of view study
of EMQ problem for unreliable manufacturing system is quite significant and meaningful. In
recent years, some researcher developed the model with machine breakdown. Berg et al.
(1994), Chung (1997), Dohi et al. (2001), Sana et al. (2006) and Chakraborty et al. (2008)
discussed the machine breakdown.
In the present scenario, fuzzy environment of the modeling is the real situation. Due to
increased awareness and more receptiveness to innovation ideas, organization today are
constantly looking for newer and better avenues to reduce their costs and increases
revenues. This particular study shows how organizations in a production model can use
S.R. Singh and Urvashi 99
their resources for the best possible outcomes. In the crisp environment all parameters in the
total cost like holding cost, set up cost, purchasing cost, demand rate and the production rate
etc. are known and have definite value without ambiguity. Under market uncertainties these
variables are treated as fuzzy parameters. When some inventory parameters are fuzzy in
nature the resultant objective function also becomes fuzzy. There is so space in the inventory
modeling with machine breakdown in fuzzy environment. Chang et al. (2004) considered a
model in which they considered demand as fuzzy random variable instead of probabilistic
fuzzy set. Dutta et al. (2007 a) considered a continuous review inventory system where the
annual averaged demand was treated as a fuzzy random variable. Dutta et al. (2007 b) and
Urvashi and Singh S.R. (2009) also discussed on fuzzy inventory model with different
conditions.
We developed the machine breakdown inventory model in the fuzzy environment. It is
assumed that different machines { Ai , i = 1, 2, 3, …, n} are dedicated to the production of
different items I with different production rates { Pi , i = 1,2,3,…, n}. The management of
production in machine Ai is vested with the management unit Bi . We assumed that a
machine may become out of order during work time. As a result, there is a mean time for
every machine between its failure/breakdown. In this model the capital available for
manufacturing items is limited. Demand rate is taken to be imprecise in nature. Expression
for the average inventory profit is obtained both crisp and imprecise sense. Later on the
fuzzy total cost is defuzzified using fuzzy extension principle thereafter it is optimized with
respect to the decision variables. Numerical example and sensitivity analysis is provided to
demonstrate its practical usages.

NOMENCLATURE & ASSUMPTIONS

Assumptions
 Model is developed for multiple items.
 Demand rate is constant for each item.
 Production rate is considered as a decision variable.
 Machine breakdown is considered during the production period.
 Idle time is considered for management of units.
 Crisp and fuzzy both the cases are considered.
100 A multi item inventory model with machine breakdown, flexible ……fuzzy environment

Nomenclature
Qi (t ) On-hand inventory of ith item at time t
Pi Production rate per unit time for the ith item
 Deterioration rate
i Mean time between successive breakdown of the machine
mi Mean time of repair of ith machine
i Mean duration of a breakdown of machine
i (ti ) Probability density function of ti
i ( i ) Probability density function of i

C hi Cost of carrying one unit of ith item in inventory per unit time

C si Shortage Cost per unit time of the ith item

S pi Selling price per unit of ith item

i ( Pi ) Cost for production of a unit of ith item

Di Demand rate for the ith item per unit time
Wi Cost of idle time of management unit Bi
CAP: Total capital available for production of all the items.

FORMULATION OF THE MODEL

The production cycle begins with zero stock. Production starts at time t  0 and stocks
reaches at the highest level Qi (ti ) at time ti . After time ti machine becomes out of order,
then repairing of machines starts and takes time to come back into working state. During the
repairing period two cases may arise: one is scenario 1(a) which is very simple and
unrealistic case second is scenario 1(b) which is very common in manufacturing firms.
Hence, our main object is to analyze scenario 1(b).
Differential Equations of the inventory system are

Qi' (t )  Qi (t )  Pi  Di with Qi (0) = 0 (1)

Qi' (t )  Qi (t )  Di with Qi (ti ) = 0 (2)

Solutions of the above equations are

S.R. Singh and Urvashi 101
( Pi  Di )
Qi (t )  (1  e t ) (3)

Di
Qi (t )   (1  e( x t ) ) (4)

Scenario 1(a):

x Idle time =0

0 ti i

Scenario 1(b):

Idle time =I -x

i

x X= (Pi-Di)ti/Di
0 ti

We conclude that the idle times of the management units { Bi , i = 1, 2, 3, …} due to

breakdown of the machines { Ai , i =1, 2, 3, ...} are

 Qi (ti )
 0, if  i
 Di
ui  
   Qi (ti ) if
Qi (ti )
 i
 i Di Di
The expected cost per breakdown of the machine { Ai , i = 1, 2, 3……} during idle time, is
 
Qi (ti )
Eic i  Wi  {  ( i  )i ( i )d i } i (ti )dti (5)
0 Qi ( ti ) Di
Di
102 A multi item inventory model with machine breakdown, flexible ……fuzzy environment

and the expected shortage cost for ith item, during idle item, is
 
Qi (ti )
Esc i  CS i Di  {  ( i  )i ( i )d i } i (ti )dti (6)
0 Qi ( ti ) Di
Di

Now the total inventory of ith item is

Invi(ti) = Inventory during[0, ti] + Inventory during [0, x]

= ( Pi  Di ) (1  e t )dt  Di (1  e ( x t ) )dt

ti x

   0
 0

( Pi  Di ) ti
( )
 ti
= ( Pi  Di ) [ti  e  1 ]  Di [ e ( Pi  Di )ti
Di
1 (7)
  ]
      
Expected inventory cost for ith item is

Eic i   Invi (ti ) i (ti )dti
0

 
 ( ( Pi DDi )ti ) 
= ( Pi  Di )
 e ti 1  D e i
1 ( P  Di )ti 
  i

t 

   i (ti )dti  i
     
  i
   i (ti )dti
(8)
0 0  
 
The production cost per unit of the item is
Gi
i ( Pi )  Ri  
 ki Pi  (9)
Pi
Here we consider the density functions are
ti
1 
 i (ti )  i 1  i mi
e , i ( i )  e
i mi

Expected total cost breakdown, including the inventory and shortages cost is,
ETC (P1, P2, P3, …) = Expected holding cost + Expected cost for idle item
+ Expected shortage cost +Expecting Production Cost
=
Pi  Di
n  ( )t ti n  

Di
Di e 1 1 Qi (ti )
  C (
i 1
h
i




)(
i
e i
)dti  Wi  {
i 1
 ( i 
Di
)i ( i ) d i } i (ti ) dti
0 0 Qi ( ti )
Di

n   n 
Qi (ti )
 Di Cs i  {  ( i  )i ( i )d i } i (ti )dti   i ( Pi ) Pti i i (ti )dti (10)
i 1 0 Qi ( ti ) Di i 1 0
Di
S.R. Singh and Urvashi 103
ETC ( P1 , P2 , P3 , ... )  f ( Pi ) Di  g ( Pi ) (11)

where

and g( )

Also the total expected production cost is

n 
Eprc =  0 i ( Pi ) Pi ti i (ti ) dti (12)
i 1

n
As the capital for manufacturing the item is limited, the constraints  i ( Pi ) Pi i  CAP
i 1

must be satisfied.

MATHEMATICAL FORMULATION OF THE FUZZY MODEL

When the demand rate becomes fuzzy, the objective function can be redefined as

ETC (P1, P2, P3……)  f ( Pi ) Di  g ( Pi )


Wavy bar denotes the fuzzification of the parameters. We express the fuzzy demand rate Di

as the triangular fuzzy number (Di  1 , Di , Di  2 ) . Suppose, the membership function of

 is as follows:
the fuzzy demand rate Di

 D  Di  1
 Di  1  D  Di

1
 Di   2  D
  ( Di )   Di  D  Di   2
Di
 2
0 elsewhere



Here, 0 < 1 < Di , 0 <  2 and Di are given fixed numbers 1 and  2 are determined by the
decision maker based on the given uncertainty. From equation (11), for each Pi , let

GPi (Di )  f ( Pi )Di  g( Pi )

GPi (Di )  g( Pi )
and y = GP ( Di ) then we have Di 
i
f ( Pi )
104 A multi item inventory model with machine breakdown, flexible ……fuzzy environment

By the extension Principle, we have the following

 GP ( Di )  g ( Pi ) 
GPi ( Di ) ( y)  Sup  D i
( Di )  Di  i 
Di GP
i
( Di )  f ( Pi ) 

 GPi (Di )  g( Pi )  (Di  1 ) f ( Pi )

 (Di  1 ) f ( Pi )  g( Pi ) 
 f ( Pi )1
 GPi (Di )  Di f ( Pi )  g( Pi )

  Di  2  f ( Pi )  GPi (Di )  g( Pi )
  Di f ( Pi )  g( Pi ) 
 f ( Pi )2
 GPi (Di )   Di  2  f ( Pi )  g( Pi )

0 elsewhere



Now, we find the centroid of G Pi ( Di ) ( y) as

 Di f ( Pi )  g ( Pi ) y  g ( Pi )  ( Di  1 ) f ( Pi )
 
G Pi ( Di ) ( y)dy  
( Di 1 ) f ( Pi )  g ( Pi ) f ( Pi )1
dy


( Di  2 ) f ( Pi )  g ( Pi )  Di   2  f ( Pi )  y  g ( Pi ) dy 1   2
= f ( Pi ) = P(say)
Di f ( Pi )  g ( Pi ) f ( Pi ) 2 2

 Di f ( Pi )  g ( Pi ) y  g ( Pi )  ( Di  1 ) f ( Pi ) ( Di  2 ) f ( Pi )  g ( Pi )  D    f ( P )  y  g ( P )
and  yGP ( Di ) ( y)dy   y dy   y i 2 i i
dy
 i ( Di 1 ) f ( Pi )  g ( Pi ) f ( Pi )1 Di f ( Pi )  g ( Pi ) f ( Pi ) 2

 f ( Pi )(1   2 ) 
  Di f ( Pi )  g ( Pi )   (1   2 ) f ( Pi )  R(say )
 3 

The centroid of G Pi ( Di ) ( y) is

f ( Pi )(1   2 )
M(Pi , 1,  2 ) =R/P= D0 f ( Pi )  g ( Pi )  (13)
3

where, 0 < 1 < D0 , 0 <  2 .

M(Pi , 1,  2 ) is the estimate of total cost in fuzzy sense.

If 1   2 , then equation (11) reduces to (12). There is only one decision variable Pi.
Therefore,

dM d 2M
 0,  0.
dPi dPi 2
S.R. Singh and Urvashi 105
Our problem is to determine the optimal value of Pi , where Pi is decision variable. The

dETC d 2 ETC
necessary condition ETC ( P1 , P2 ...) for to be minimum is  0, provided  0.
dPi dPi 2
NUMERICAL EXAMPLE
With the help of computer software MATHEMATICA 5.2, we solve the problem
numerically. Let i = 1, 2, i.e., 2 items. We consider the following sets of parameters value in
appropriate units:
Items
Wi µi mi Ri ki Gi Di Chi Csi 
no.(i)
1 40 8 0.6 0.8 0.02 6.25 200 0.07 3 0.03
2 35 8.5 0.5 1.2 0.015 7.50 300 0.08 3.5 0.03

* *
We find that the optimum solution is P1 = 204.9272, P2 = 305.9327, ETC= 359.534.

Sensitivity Analysis for the cost of ideal time (Wi)

Change in % ETC
-50% -0.264 0.0 -3.801
-25% -0.131 0.0 -2.908
+25% +0.131 0.0 +1.895
+50% +0.260 0.0 +3.785

CONCLUSION
For the first time EMQ model is developed in presence of fuzzy environment. Model is
developed in both the environment crisp and imprecise. The reason for adaptation of this
model is (1) the execution of fuzzy random variables as demand and production gives more
realistic information where the variable values are indefinite, (2) Incorporation of
imprecision and improbability in machine breakdown production process, (3) Capacity
constraint is also a realistic situation. From the table of sensitivity analysis, we can point out
that as the ideal time of the machine system increased, total cost is also increased.
The present model can be extended to include the shortages, delay in payments, inflation,
different types of demand and deterioration rates.

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