Statistical Methods in Finance 2017

Dec 16 - 19, 2017


Abstract

Total Cost Bounds with Probabilistic Cost function under Varying Supply and Demand in Transportation Problem

by Firoz Ahmad

In the present competitive world, it is often said that "Time is Money"" in every aspects of life. Time is a factor which affects the various real life problems directly or indirectly. So, in order to incorporate the "time"" as a factor in transportation problems (TPs), we have considered the probabilistic cost/profit function termed as "Survival Cost/Profit" which is again a time dependent function. In this study, we have assumed that the supply and demand quantities are varying between some specified intervals. Due to the variation in the supply and demand quantities, the value of objective function is also obtained between interval which is bounded by lower and upper values. Finally, after considering the stated assumptions, we have developed the mathematical model for minimizing the total cost and maximizing the total profit. The solution procedure has also been discussed to solve the proposed mathematical model. At last, a numerical illustration has been presented to show the validity of the model and solution procedure which is helpful in decision making process.