Analysing Price, Quality and Lead Time Decisions with the Hybrid Solution Method of Fuzzy Logic and Genetic Algorithm

In this paper, the problem of determining the quality level, lead time for order delivery and price of a product produced by a manufacturer is considered. In this problem the demand for the product is influenced by all three decision variables: price, lead time and quality level. To formulate the demand function, a fuzzy rule base that estimates the demand value based on the three decision variables is developed. To do so, the linguistic knowledge of experts in the form of if-then rules is used to establish the fuzzy system. Moreover, in order to solve the problem, a genetic algorithm integrating the fuzzy rule base is proposed. Finally, to support the validity of the proposed solution, a numerical study is provided.

Keywords:

Fuzzy Logic , Linguistic variable , Genetic algorithm , Pricing , Quality level , Lead time