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A decision-making tool for integrated order allocation planning and warehouse systems in an incomplete information environment

Author

Listed:
  • W. Widowati
  • S. Sutrisno
  • Redemtus Heru Tjahjana

Abstract

Order allocation planning and inventory management are significant challenges faced when deciding the number of raw materials to purchase from alternative suppliers and store in warehouses for minimal total operational cost. This problem is attributed to incomplete information that makes decision making difficult. Therefore, this study aimed to define problems in an incomplete information environment using fuzzy and probabilistic parameters. Generally, the decision-maker has the data to build their probability distribution functions in probabilistic parameters. However, the available data do not represent the parameters anymore in fuzzy. The parameters include future raw material price, transport cost, and defect rate in manufacturing industries due to fluctuations over time. This study proposed a mathematical optimisation that uses an uncertain linear programming algorithm to calculate the optimal decision. A numerical experiment was performed to illustrate how the problem is solved. The results showed that the proposed model succeeded in determining the optimal decision.

Suggested Citation

  • W. Widowati & S. Sutrisno & Redemtus Heru Tjahjana, 2022. "A decision-making tool for integrated order allocation planning and warehouse systems in an incomplete information environment," International Journal of Integrated Supply Management, Inderscience Enterprises Ltd, vol. 15(3), pages 329-348.
    • Handle: RePEc:ids:ijisma:v:15:y:2022:i:3:p:329-348
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