INVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY

If ever the concept 'VUCA' (Volatility, Uncertainty, Complexity, and Ambiguity) seemed appropriate to use, it is now. National and global companies experience the highest level of instability due to the Covid-19 pandemic, which is the classic example of a highly volatile, uncertain, comple...

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Autores principales:	Lidia Vesa, Marcel Ioan Boloș, Claudia Diana Sabău-Popa
Formato:	article
Lenguaje:	DE EN FR IT
Publicado:	University of Oradea 2021
Materias:	fuzzy logic system, economic production quantity, demand, cost, fuzzy inference, fuzzification, defuzzification Business HF5001-6182 Finance HG1-9999
Acceso en línea:	https://doaj.org/article/499dc2b5a291437a8db407c46963c520
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spelling	oai:doaj.org-article:499dc2b5a291437a8db407c46963c5202021-11-09T19:45:21ZINVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY1222-569X1582-5450https://doaj.org/article/499dc2b5a291437a8db407c46963c5202021-07-01T00:00:00Zhttp://anale.steconomiceuoradea.ro/volume/2021/n1/028.pdfhttps://doaj.org/toc/1222-569Xhttps://doaj.org/toc/1582-5450If ever the concept 'VUCA' (Volatility, Uncertainty, Complexity, and Ambiguity) seemed appropriate to use, it is now. National and global companies experience the highest level of instability due to the Covid-19 pandemic, which is the classic example of a highly volatile, uncertain, complex, and ambiguous world. In this world, decision-makers have to face more challenges appealing to the VUCA Prime leadership approach: vision against volatility, understanding against uncertainty, clarity against complexity, and agility against ambiguity. Some of the ways through which managers can overcome the VUCA characteristics include: providing a shared vision as a criterion for all decisions to be made, identifying the reason for the decision problems and sharing the idea with the followers, going through the entire decision process, following steps in proper order, and developing quick solutions. In an inventory decision taken in a VUCA context, the above ways are possible if using fuzzy inventory methods dealing with volatility, uncertainty, complexity, and ambiguity. This paper aims to adapt a traditional inventory method, Economic Production Quantity (EPQ), to the challenges of the VUCA world, through the fuzzy logic system (FLS). To achieve the best solution for the decision problem in the shortest time possible, the managers can employ a conversion by using the computing platform MATLAB. There are some advantages of this conversion for these two methods, EPQ and FLS. Firstly, the transformation of EPQ in ELQ (Economic Logic Quantity) allows managers to formulate the decision problem, even if they cannot identify and measure precisely the EPQ parameters. Secondly, using FLS to solve ELQ provides the possibility to simulate more alternatives and generate the solution in the shortest amount of time. Thirdly, it allows the decision-makers to evaluate the impact of the solution provided by each simulation on the company's performance. Using these methods has the following primary limit: the problem formulation step depends on the managers' understanding ability and managing a large volume of information. Therefore, there may be a risk of obtaining a relevant solution for a decision problem if the decision-makers do not understand the cause of the problem or do not know how to organize and manage a large volume of information. This limit could be overcome by using AHP (Analytic Hierarchy Process), but this is the topic of further research.Lidia VesaMarcel Ioan BoloșClaudia Diana Sabău-PopaUniversity of Oradeaarticlefuzzy logic system, economic production quantity, demand, cost, fuzzy inference, fuzzification, defuzzificationBusinessHF5001-6182FinanceHG1-9999DEENFRITAnnals of the University of Oradea: Economic Science, Vol 30, Iss 1, Pp 251-267 (2021)
institution	DOAJ
collection	DOAJ
language	DE EN FR IT
topic	fuzzy logic system, economic production quantity, demand, cost, fuzzy inference, fuzzification, defuzzification Business HF5001-6182 Finance HG1-9999
spellingShingle	fuzzy logic system, economic production quantity, demand, cost, fuzzy inference, fuzzification, defuzzification Business HF5001-6182 Finance HG1-9999 Lidia Vesa Marcel Ioan Boloș Claudia Diana Sabău-Popa INVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY
description	If ever the concept 'VUCA' (Volatility, Uncertainty, Complexity, and Ambiguity) seemed appropriate to use, it is now. National and global companies experience the highest level of instability due to the Covid-19 pandemic, which is the classic example of a highly volatile, uncertain, complex, and ambiguous world. In this world, decision-makers have to face more challenges appealing to the VUCA Prime leadership approach: vision against volatility, understanding against uncertainty, clarity against complexity, and agility against ambiguity. Some of the ways through which managers can overcome the VUCA characteristics include: providing a shared vision as a criterion for all decisions to be made, identifying the reason for the decision problems and sharing the idea with the followers, going through the entire decision process, following steps in proper order, and developing quick solutions. In an inventory decision taken in a VUCA context, the above ways are possible if using fuzzy inventory methods dealing with volatility, uncertainty, complexity, and ambiguity. This paper aims to adapt a traditional inventory method, Economic Production Quantity (EPQ), to the challenges of the VUCA world, through the fuzzy logic system (FLS). To achieve the best solution for the decision problem in the shortest time possible, the managers can employ a conversion by using the computing platform MATLAB. There are some advantages of this conversion for these two methods, EPQ and FLS. Firstly, the transformation of EPQ in ELQ (Economic Logic Quantity) allows managers to formulate the decision problem, even if they cannot identify and measure precisely the EPQ parameters. Secondly, using FLS to solve ELQ provides the possibility to simulate more alternatives and generate the solution in the shortest amount of time. Thirdly, it allows the decision-makers to evaluate the impact of the solution provided by each simulation on the company's performance. Using these methods has the following primary limit: the problem formulation step depends on the managers' understanding ability and managing a large volume of information. Therefore, there may be a risk of obtaining a relevant solution for a decision problem if the decision-makers do not understand the cause of the problem or do not know how to organize and manage a large volume of information. This limit could be overcome by using AHP (Analytic Hierarchy Process), but this is the topic of further research.
format	article
author	Lidia Vesa Marcel Ioan Boloș Claudia Diana Sabău-Popa
author_facet	Lidia Vesa Marcel Ioan Boloș Claudia Diana Sabău-Popa
author_sort	Lidia Vesa
title	INVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY
title_short	INVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY
title_full	INVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY
title_fullStr	INVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY
title_full_unstemmed	INVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY
title_sort	inventory decision in vuca world using economic logic quantity
publisher	University of Oradea
publishDate	2021
url	https://doaj.org/article/499dc2b5a291437a8db407c46963c520
work_keys_str_mv	AT lidiavesa inventorydecisioninvucaworldusingeconomiclogicquantity AT marcelioanbolos inventorydecisioninvucaworldusingeconomiclogicquantity AT claudiadianasabaupopa inventorydecisioninvucaworldusingeconomiclogicquantity
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INVENTORY DECISION IN VUCA WORLD USING ECONOMIC LOGIC QUANTITY

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