Inventory Optimization Model to Increase Profit Considering Parabolic Holding Cost

Abstract

In the dynamic corporate landscape, effective inventory management is crucial for sustaining competitiveness and boosting profits. Excess inventory remains a critical factor, as even well-organized enterprises may experience an oversupply of certain items within defined periods. In this paper, we optimize inventory level wih parabolic holding cost. Holding costs can fluctuate non-linearly in unpredictable situations such as sudden demand changes, supply chain disruptions, or economic fluctuations. Employing a parabolic holding cost enables a more accurate representation of these variations. We utilize the Fermatean fuzzy number to address the complexities of uncertain demand, Selling price and overhaul cost in inventory optimization. Furthermore, this paper offers empirical validation through a numerical illustration.