AN OPTIMIZATION MODEL OF ECONOMIC ORDER QUANTITY (EOQ) WITH A KNOWN PRICE INCREASE SYSTEM AND PARTIAL BACKORDERING

Abstract

An Economic Order Quantity (EOQ) optimization model is one of the methods used to solve problems in inventory management system by determining optimal order quantity and optimal order time, so that maximum profit are obtained. An optimization model in this paper is EOQ optimization model for a known price increase and not all consumers disposed to wait until the order came (partial backordering). With the price increase make a retailer must decide to make a special order or not. In this paper, an EOQ optimization model formulation study is given with make a special order or not, then a numerical example is given to illustrate the proposed model in the form of case studies. The optimal simulation is obtained based on the data from Pinus Merah Abadi PT and the results are the optimum time of reservation is 24 days for once the orders, with the optimal number of orders was 72.239 box of Nabati 50gr and no one of requests filled in as many as backorder. Profit per period expected a certain amount of Rp. 82.772.826,-. Keywords : Inventory, Economic Order Quantity, A Known Price Increase, Stockout,Partial Backorder.