Optimal Strategies for Interval Economic Order Quantity (IEOQ) Model with Hybrid Price-Dependent Demand via C-U Optimization Technique

In inventory management, business organizations gradually face challenges due to the complexities of managing perishable goods whose value diminishes over time. In such circumstances, interval’s bounds estimated business policy can be adopted to study a non-deterministic inventory model incorporating decay, preservation technology, and financial incentives, viz. advanced payments and fixed discounts. This study explores an interval Economic Order Quantity (EOQ) model incorporating advanced payment with discount options under preservation technology framework in interval environment. In this model, the demand rate is expressed as a convex combination of linear and power patterns of the selling price. The present model is formulated mathematically using interval differential equations and interval mathematics. Then, the corresponding interval-valued average profit of the model is obtained. In order to optimize the corresponding interval optimization problem, C-U optimization technique is developed. Employing the C-U optimization technique, the said interval optimization problem is converted into crisp optimization problems. Then, these problems are solved numerically by Wolfrom MATHEMATICA-11.0 software and validated with the help of two numerical examples. Finally, sensitivity analyses have been performed to study the impact of known inventory parameters on optimal policy.