ABSTRACT
This paper determines a procurement strategy where demand over a finite planning horizon is uncertain. Demand variations make forecasting and inventory management more difficult and tend to increase inventory levels which emphasis on proper procurement strategy. Here procurement strategy is developed by considering limited approved suppliers and multiple products. It is assumed that the suppliers are approved for the case with limited capacity but not free from imperfect quality. Defective items from supplier are sold at a discounted lower price. Some critical parameters for determining optimal procurement strategies like maximum storage space for the buyer, standard deviation of lead time demand and the corresponding product dependent compensation cost for imperfect quality are also considered here where an order is placed on a supplier depend on transaction cost for each period. Here shortage or backordering is not allowed. To make such problems realistic, the triangular possibility distribution of fuzzy numbers and the concept of minimum accepted level method are employed to formulate the problem. The whole mathematical model is structured and represented as linear programming model and was solved by an efficient meta-heuristic algorithm (Genetic Algorithm). Some computational studies were also carried on to prove its acceptance in the real world.
