Jurnal Matematika MANTIK Vol 7, No 2, October 2021, pp. 20-29 CONTACT: E. Susanti, eka_susanti@mipa.unsri.ac.id Departement of Mathematics, Universitas Sriwijaya Palembang, Sumatera Selatan 30662, Indonesia The article can be accessed here. https://doi.org/10.15642/mantik.2021.7.2.124-131 Optimization of Inventory Level Using Fuzzy Probabilistic Exponential Two Parameters Model Eka Susanti1, Indrawati2, Robinson Sitepu3, Karita Ondhiana4, Widya Dwi Wulandari5 1,2,3,4,5 Department of Mathematics, Universitas Sriwijaya, Palembang, Indonesia Article history: Received Nov 30, 2020 Revised, May 30, 2021 Accepted, Oct 31, 2021 Kata Kunci: Inventori fuzzy probabilistik, Distribusi eksponensial, Distribusi Pareto Abstrak. Pengendalian persediaan adalah faktor penting dalam kegiatan perdagangan. Pengendalian persediaan bertujuan untuk menjamin ketersediaan produk. Terdapat beberapa faktor yang mempengaruhi tingkat persediaan diantaranya faktor tingkat permintaan, persediaan maksimal produk dan tingkat kerusakan. Jika faktor yang mempengaruhi tidak dapat didefinisikan dengan pasti dan mengikuti distribusi statisik tertentu maka pendekatan fuzzy probabilistik dapat diterapkan. Pada penelitian ini dibahas masalah optimasi persediaan cabai merah pada tingkat pengecer. Tingkat kerusakan diasumsikan mengikuti distribusi eksponensial dan permintaan mengikuti distribusi Pareto. Parameter statistik diestimasi dengan metode Maksimum likelihood dan parameter biaya dinyatakan dengan bilangan fuzzy segitiga. Berdasarkan hasil perhitungan untuk beberapa nilai beta diperoleh total biaya tertinggi sebesar Rp 405143.6 dengan tingkat persediaan maksimum sebanyak 15 kg dan waktu siklus pemesanan selama 0.923 hari. Keywords: Fuzzy probabilistic inventory, Exponential distribution, Pareto distribution Abstract. Inventory control is an important factor in trading activities. Inventory control aims to ensure product availability. Several factors affect the level of inventory including the level of demand factor, maximum inventory, and the level of deterioration. If the influencing factors cannot be defined with certainty and follow a certain statistic distribution then the fuzzy probabilistic approach can be applied. This research discusses the problem of optimizing the inventory of red chillies at the retail level. The level of deterioration is assumed to follow an exponential distribution and demand follows a Pareto distribution. Statistical parameters are estimated using the Maximum likelihood method and cost parameters are expressed by triangular fuzzy numbers. Based on the calculation results for several beta values, the highest total cost is 405143.6 rupiah, a maximum inventory level of 15 kg, and an order cycle time of 0.923 days. How to cite: E. Susanti et al, β€œOptimization of Inventory Level Using Fuzzy Probabilistic Exponential Two Parameters Model, J. Mat. Mantik, vol. 7, no. 2, pp. 124-131, October 2021. Jurnal Matematika MANTIK Vol. 7, No. 2, October 2021, pp. 124-131 ISSN: 2527-3159 (print) 2527-3167 (online) mailto:eka_susanti@mipa.unsri.ac.id http://u.lipi.go.id/1458103791 Jurnal Matematika MANTIK Vol 7, No 2, October 2021, pp. 124-131 125 1. Introduction Inventory planning is an important stage in production, distribution and trading activities. Planning is carried out to ensure product availability in fulfilling consumer demand activities. The inventory model can be applied to inventory planning activities. The inventory system is given operational policies related to product storage control, such as how much is the maximum inventory, when to order and stock out time to minimize the total cost of ordering. Research related to inventory methods has been developed and applied in various fields. Inventory and supply chain problems to determine the optimal location, optimal route for distribution activities are discussed by [1]. The problem of inventory optimization with various payment systems is discussed by [2]. EOQ model with nonlinear constraints in inventory problem discussed by [3]. The solution method used by [4] for the inventory model is the algebraic method. The fruit fly algorithm modification method was introduced by [5] to solve the problem of inventory and allocation optimization. The problem of inventory for perishable products is discussed by [6]. the concept of inventory to the health sector introduced by [7]. The research that has been mentioned is an implementation of the deterministic inventory concept with demand and the parameters that affect it can be stated with certainty. In some cases, the parameters cannot be stated with certainty, for example, data obtained from the forecasting process, unequal and unpredictable demand data in the next period. Fuzzy probabilistic and stochastic approaches can be used to solve inventory problems with uncertainty. The following is research related to inventory problems with uncertainty. Stochastic inventory model to the problem of perishable product inventory introduced by [8]. The queuing theory is applied by [9] to solve the stochastic inventory problems. A Tri-Level Optimization model and a stochastic model with demand and lead time in uncertainty were introduced by [10]. In [11] discussed the problem of stochastic inventory with demand depending on price. If the parameters are considered following a certain statistical probability distribution and contain an element of uncertainty, then the probabilistic inventory model is appropriate to use, either the deterministic approach or the fuzzy approach. The probabilistic inventory model was introduced by [12]. A review of some literature related to inventory problems with a fuzzy approach is given by [13]. In [14] discussed probabilistic inventory with time-dependent storage costs and considering the extent of the damage. A two-parameter probabilistic inventory model was introduced by [15] and applied to chemical inventory. In [16] discussed a probabilistic inventory model for waiting times. Fuzzy concepts can be applied to inventory problems with uncertainty. The following is research related to the fuzzy concept. The fuzzy concept to the forecasted data is discussed by [17]. In [18] studied the relationship between fuzzy and probabilistic concepts. The method for solving nonlinear problems with fuzzy intervals was introduced by [19]. The concept of zero set in fuzzy optimization problems is used by [20]. The fuzzy concept is also discussed by [21] and applied to fuzzy transportation problems. In this study, a two-parameter probabilistic inventory model introduced by [15] was implemented in the red chilli inventory planning problem where the cost and time parameters are represented by triangular fuzzy numbers. The tolerance value to the left and right of the triangular fuzzy number is taken from the deviation value of the data. The defuzzification stage uses the concept of Ξ±-cut. Statistical parameters were estimated using the Maximum Likelihood. This research discusses optimizing the inventory level of red chillies and the optimal ordering cycle at one of the traders located in the modern market of Palembang city. The merchant places orders every day. Unsold red chillies are not stored in a special room. The level of damage to red chillies is assumed to follow an exponential distribution. The demand for unsold red chillies sold every day is limited, in this study the level of demand is assumed to follow the Pareto distribution. Eka Susanti et al. Optimization of Inventory Level Using Fuzzy Probabilistic Exponential Two Parameters Model 126 2. Research Method The data used in this research is primary data. Data were collected by interviewing one of the traders. The data collection period is 30 days. Interviews were conducted by telephone. Primary data consist of purchase data, the number of red chillies sold every day. Following is the procedure for solving the problem of optimization of inventory levels and the cycle time for ordering red chillies. a. Defining parameters and variables There are six cost parameters (𝐢𝑝, πΆπ‘œ, 𝐢𝑏 , πΆβ„Ž , 𝐢𝑑 , 𝐾𝑑 ), namely the cost of purchasing unit items for one order cycle, ordering costs, backlogged costs, storage costs, damage costs, and goals related to the estimated cost of damage. Based on 30 days records, the mean and deviation for each cost were obtained. Cost and deviation data are given in table 1. Statistical parameters of the two-parameter exponential distribution and the Pareto distribution were estimated using the maximum likelihood method. Estimated data are data on the level of damage and the level of demand. b. Fuzzification stage At this stage, the parameter values are defined in the form of triangular fuzzy numbers. The definition of values is based on the data obtained. This parameter is a cost parameter. Following are given the values of fuzzy parameters and statistical parameters. �̃�𝑝, οΏ½ΜƒοΏ½π‘œ, �̃�𝑏 , οΏ½ΜƒοΏ½β„Ž , �̃�𝑑, �̃�𝑑; 𝜎, πœ‚ c. Defuzzification stage At the defuzzification stage, the fuzzy parameters are transformed into a deterministic form using the Ξ±-cut concept. d. Formulation of a two-parameter fuzzy probabilistic model The following gives a fuzzy probabilistic model with a Pareto distribution of demand and the level of damage with an exponential distribution introduced by [15]. minimize 𝐸(𝑇𝐢(π‘„π‘š , 𝑛𝑑 , 𝑛1, 𝑁, )) (1) Subject to 𝐸(𝐷𝐢(π‘„π‘š , 𝑛𝑑 , 𝑛1, 𝑁, )) ≀ π‘˜οΏ½ΜƒοΏ½ (2) Where 𝐸(𝑇𝐢) : expected annual total cost 𝐸(𝐷𝐢) : expected varying deteriorating cost 𝐸(𝑉𝐢) : expected the salvage cost 𝐸(𝐡𝐢) : expected backorder cost π‘„π‘š : maximum inventory level (kg) 𝑛𝑑 : time of deterioration (days) 𝑛1 : time of stock out (days) 𝑁 : time of review cycle (days) π‘˜οΏ½ΜƒοΏ½ : the fuzzy goal associated to expected deterioration cost (Rupiah) �̃�𝑝 : the fuzzy purchase cost unit item at a cycle ordering (Rupiah) οΏ½ΜƒοΏ½π‘œ : the fuzzy ordering cost unit item at a cycle ordering (Rupiah) �̃�𝑏 : the fuzzy backlogged cost unit item at a cycle ordering (Rupiah) οΏ½ΜƒοΏ½β„Ž : the fuzzy storage cost unit item at a cycle ordering (Rupiah) �̃�𝑑 : the fuzzy damage cost unit item at a cycle ordering (Rupiah) e. The nonlinear model solution obtained in Step (4) uses Lingo software Model formulations and completion procedures are given in the results and discussion sections. Jurnal Matematika MANTIK Vol 7, No 2, October 2021, pp. 124-131 127 3. Result and Discussions In this study, it was determined the optimal supply and ordering time on the optimization problem of supply of red chilli from one of the traders. Cost parameters were measured for 30 days of recording. The following are given the average and deviation of each cost parameter. Table 1. Costs Parameter Data Cost Parameter Average (Rupiah) Deviation (Rupiah) 𝐢𝑝 36800 7500 πΆπ‘œ 6000 2200 𝐢𝑏 38400 500 πΆβ„Ž 17500 6900 𝐢𝑑 1900 2000 𝐾𝑑 7000 1000 In this study, a fuzzy probabilistic model with two-parameter exponential distribution and a Pareto distribution was implemented. The cost parameter values are expressed in the triangular fuzzy numbers. Based on the data in table 1, the triangular fuzzy number can be determined as introduced by [15]. The following parameter values are given. 𝐢�̃� = (𝐢𝑝 βˆ’ πœ”1, 𝐢𝑝 , 𝐢𝑝 + πœ”2) = (29300; 36800 ; 44400) 𝐢�̃� = (πΆπ‘œ βˆ’ πœ”3, πΆπ‘œ , πΆπ‘œ + πœ”4) = (3800; 6000; 8400) πΆβ„ŽΜƒ = (πΆβ„Ž βˆ’ πœ”5, πΆβ„Ž , πΆβ„Ž + πœ”6) = (17000; 17500; 19000) 𝐢�̃� = (𝐢𝑏 βˆ’ πœ”7, 𝐢𝑏 , 𝐢𝑏 + πœ”8) = (31500; 38400; 45400) 𝐢�̃� = (𝐢𝑑 βˆ’ πœ”9, 𝐢𝑑 , 𝐢𝑑 + πœ”10) = (4000; 6000; 19000) 𝐾�̃� = (𝐾𝑑 βˆ’ πœ”11, 𝐾𝑑 , 𝐾𝑑 + πœ”12) = (6000; 7000 ; 9000) Where πœ”π‘– , 𝑖 = 1,2, … ,12 are arbitrary positive numbers that satisfy the following constraints. 0 ≀ πœ”1 ≀ 𝐢𝑝, πœ”2 β‰₯ 0 0 ≀ πœ”3 ≀ πΆπ‘œ, πœ”4 β‰₯ 0 0 ≀ πœ”5 ≀ πΆβ„Ž , πœ”6 β‰₯ 0 0 ≀ πœ”7 ≀ 𝐢𝑏 , πœ”8 β‰₯ 0 0 ≀ πœ”9 ≀ 𝐢𝑑 , πœ”10 β‰₯ 0 0 ≀ πœ”11 ≀ 𝐾𝑑 , πœ”12 β‰₯ 0 using the concept of Ξ±-cut introduced by [15] at the defuzzification stage obtained the following parameter values. β€’ �̃�𝑝 = 𝐢𝑝 + 1 4 (πœ”2 βˆ’ πœ”1) �̃�𝑝 = 36800 + 1 4 (7600 βˆ’ 7500) �̃�𝑝 = 36800 + 1 4 (100) �̃�𝑝 = 36825 β€’ οΏ½ΜƒοΏ½β„Ž = πΆβ„Ž + 1 4 (πœ”6 βˆ’ πœ”5) οΏ½ΜƒοΏ½β„Ž = 17500 + 1 4 (1500 βˆ’ 500) οΏ½ΜƒοΏ½β„Ž = 17500 + 1 4 (1000) οΏ½ΜƒοΏ½β„Ž = 17750 Eka Susanti et al. Optimization of Inventory Level Using Fuzzy Probabilistic Exponential Two Parameters Model 128 β€’ �̃�𝑏 = 𝐢𝑏 + 1 4 (πœ”8 βˆ’ πœ”7) �̃�𝑏 = 38400 + 1 4 (7000 βˆ’ 6900) �̃�𝑏 = 38400 + 1 4 (1100) �̃�𝑏 = 38425 β€’ �̃�𝑑 = 𝐢𝑑 + 1 4 (πœ”10 βˆ’ πœ”9) �̃�𝑑 = 6000 + 1 4 (13000 βˆ’ 5600) �̃�𝑑 = 6000 + 1 4 (7400) �̃�𝑑 = 7850 β€’ �̃�𝑑 = 𝐾𝑑 + 1 4 (πœ”12 βˆ’ πœ”11) �̃�𝑑 = 7000 + 1 4 (2000 βˆ’ 1000) �̃�𝑑 = 7000 + 1 4 (1000) �̃�𝑑 = 7250 The parameter estimation for the level of deterioration has an exponential distribution of two parameters and the level of demand has a Pareto distribution. Parameter estimation using Maximum Likelihood. 𝐿(𝜎, πœ‡) = ∏ 1 𝜎 𝑒 βˆ’ (π‘‘βˆ’πœ‡) 𝜎 𝑛 𝑖=1 = ( 1 𝜎 ) 𝑛 exp ( βˆ’ βˆ‘(π‘₯π‘–βˆ’πœ‡) 𝜎 ) , βˆ€π‘₯𝑖 β‰₯ πœ‡ 𝑑 ln 𝐿(𝜎,πœ‡) π‘‘πœŽ = βˆ’ 𝑛 𝜎 + βˆ‘(π‘₯π‘–βˆ’πœ‡) 𝜎2 = 0, οΏ½Μ‚οΏ½ = βˆ‘(π‘₯π‘–βˆ’οΏ½Μ‚οΏ½) 𝑛 𝐿(πœ‚, 𝛿) = ∏ πœ‚π›Ώπœ‚ (π‘₯+𝛿)πœ‚+1 𝑛 𝑖=1 = πœ‚π‘› 𝛿 π‘›πœ‚ ∏ 1 (π‘₯+𝛿)πœ‚+1 𝑛 𝑖=1 = ln πœ‚π‘› + ln 𝛿 π‘›πœ‚ + (βˆ’πœ‚ βˆ’ 1) βˆ‘ ln π‘₯𝑖 𝑛 𝑖=1 + 𝛿 = πœ• πœ•πœ‚ [ln πœ‚π‘› + ln 𝛿 π‘›πœ‚ + (βˆ’πœ‚ βˆ’ 1) βˆ‘ ln π‘₯𝑖 𝑛 𝑖=1 + 𝛿] = 𝑛 πœ‚ + 𝑛 ln 𝛿 βˆ’ βˆ‘ ln π‘₯𝑖 𝑛 𝑖=1 + 𝛿 = 0 𝑛 πœ‚ = βˆ‘ ln π‘₯𝑖 𝑛 𝑖=1 + 𝛿 βˆ’ ln 𝛿 �̂�𝐿 = 𝑛 βˆ‘ ln π‘₯𝑖+𝛿 𝛿 𝑛 𝑖=0 , 𝛿 = min π‘₯𝑖 The estimated value are 𝛿 = 1,47 πœ‚ = 0,8618 , 𝜎 = 0,08 . The formulation of a two- parameter fuzzy probabilistic model on the problem of determining the level of inventory red chilis is as follows. Min 𝐸(𝑇𝐢) = 𝐸(𝑂𝐢) + 𝐸(𝑃𝐢) + 𝐸(𝐷𝐢) + 𝐸(𝑉𝐢) + 𝐸(𝐡𝐢) (3) Subject to Jurnal Matematika MANTIK Vol 7, No 2, October 2021, pp. 124-131 129 𝐸(𝐷𝐢) ≀ �̃�𝑑 (4) 𝑁 β‰₯ 0 (5) Where 𝐸(𝑂𝐢) = οΏ½ΜƒοΏ½0 = 6050 𝐸(𝑃𝐢) = �̃�𝑝 οΏ½ΜƒοΏ½ ∫ π‘₯ 𝑓(π‘₯) 𝑑π‘₯ ∞ π‘₯=0 𝐸 (𝑃𝐢) = 36.825 οΏ½ΜƒοΏ½ ∫ π‘₯ 0,8618 Γ— 1,470,8618 (π‘₯ + 1,47)0,8618 𝑑π‘₯ ∞ π‘₯=0 𝐸 (𝐷𝐢) = �̃�𝑑 𝑁 𝛽 (οΏ½ΜƒοΏ½π‘š βˆ’ ∫ π‘₯ 𝑓(π‘₯)𝑑π‘₯ οΏ½ΜƒοΏ½π‘š π‘₯=0 ) = 7850 𝑁𝛽 (οΏ½ΜƒοΏ½π‘š βˆ’ ∫ π‘₯ 0,8618 Γ— 1,470,8618 (π‘₯ + 1,47)0,8618 𝑑π‘₯ οΏ½ΜƒοΏ½π‘š π‘₯=0 ) 𝐸 (𝑉𝐢) = �̃�𝑑 𝛾 𝑁 𝛽 (π‘„π‘š βˆ’ ∫ π‘₯ 𝑓(π‘₯) 𝑑π‘₯ π‘„π‘š π‘₯=0 ) = 7850 (0,02) 𝑁𝛽 (π‘„π‘š βˆ’ ∫ π‘₯ 0,8618 Γ— 1,470.8618 (π‘₯ + 1,47)0,8618 𝑑π‘₯ π‘„π‘š π‘₯=0 ) 𝐸 (𝐡𝐢) = �̃�𝑏 [∫ π‘₯ βˆ’οΏ½ΜƒοΏ½π‘š ∈ (1 βˆ’ 1 ∈(οΏ½ΜƒοΏ½βˆ’οΏ½ΜƒοΏ½1) ln[1+ ∈ (οΏ½ΜƒοΏ½ βˆ’ οΏ½ΜƒοΏ½1)]) 𝑓(π‘₯)𝑑π‘₯ ∞ οΏ½ΜƒοΏ½π‘š ] 𝐸 (𝐡𝐢) = 38425 [ ∫ π‘₯ βˆ’ οΏ½ΜƒοΏ½π‘š 0,5 (1 ∞ οΏ½ΜƒοΏ½π‘š βˆ’ 1 0,5(οΏ½ΜƒοΏ½ βˆ’ οΏ½ΜƒοΏ½1) ln[1 + 0,5(οΏ½ΜƒοΏ½ βˆ’ οΏ½ΜƒοΏ½1)]) 0,8618 Γ— 1,470,8618 (π‘₯ + 1,47)0,8618 𝑑π‘₯] The optimal solution is determined for some 𝛽 value. 𝛽 is an arbitrary positive number with 0 ≀ 𝛽 ≀ 1. For the 𝛽 = 0,1; 0,3; 0,5; 0,9; 1. Nonlinear models (3), (4), (5) are solved using the lingo software, the following solution is obtained. Table 2. Solution Nonlinear Model 𝛽 𝑁 π‘„π‘š 𝐸(𝑇𝐢) 𝐸(𝑇𝐢)/π‘„π‘š 0,1 0 10 397748,6 39774,86 0,3 0 10 397748,6 39774,86 0,5 0,128 15 405022 27001,466 0,9 0,247 15 405240,2 27001,48 1 0,923 10 405143,6 40514,36 The minimum total cost is influenced by the variable value 𝛽, 𝑁 and π‘„π‘š. Based on table 2, it can be seen that the more the value approaches 1, the ordering cycle is getting closer to 1 and the total costs incurred are increasing. The maximum inventory is 15 kg and the largest total cost is Rp 405143,6. The largest total cost occurs when the value of 𝑁 increases. The length of the time of review cycle is affected by the remaining inventory and the remaining product incurs storage costs. Base on the results obtained, the optimal Eka Susanti et al. Optimization of Inventory Level Using Fuzzy Probabilistic Exponential Two Parameters Model 130 amount of red chillies that can be ordered so that the minimum cost is 10 kg with the length of the time of review cycle is 0. A value of 𝑁 equal to zero means that the red chillies ordered were sold out immediately or the seller can order as much as 15 kg with a review cycle duration of 0,128 days or approximately 3 hours. 4. Conclusion Based on the results and discussion, it can be concluded that the fuzzy approach can be applied to inventory optimization problems with uncertainty. The choice of 𝛽 variable value influences the solution obtained. The ordering cycle is getting closer to one day and the total costs incurred are increasing for the 𝛽 value close to 1. 𝛽 value affects the value of 𝑁. The greater the 𝛽 value, the greater the value of 𝑁. Consequently, the total costs are increasing. The maximum inventory level of red chillies is 15 kg. 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