A multi-item mixture inventory model involving random lead time and demand with budget constraint and surprise function

AbstractThis study deals with a multi-item mixture inventory model in which both demand and lead time are random. A budget constraint is also added to this model. The optimization problem with budget constraint is then transformed into a multi-objective optimization problem with the help of fuzzy chance-constrained programming technique and surprise function. In our studies, we relax the assumption about the demand, lead time and demand during lead time that follows a known distribution and then apply the minimax distribution free procedure to solve the problem. We develop an algorithm procedure to find the optimal order quantity and optimal value of the safety factor. Finally, the model is illustrated by a numerical example