Inventory Model with Linear Demand Using The Payment Delay System

Abstract

One of the problems frequently encountered in the inventory system is determining the amount of inventory that should be provided to meet demand, particularly in the case of payment delays.There are two parties involved: suppliers and retailers. Delay payment occurs if the booking amount reaches the minimum limit orders and payments made are still in the period of delay, then the retailers do not have to pay interest. But, if the payment is already going through periods of delay that exists, then the supplier will charge a fee (bank services) to the retailer. With the payment delay, it is necessary to determinethe effect of the period of payment delay on the amount oforder.It will be shownhow to determine the charging cycle to the optimum time (T*) and the optimal order quantity (Q*) using the model formulation EOQ  and Case study on a Dodol retailer gives the optimum time T = 0.1567 or 57 days and obtained Q * = 386.168 kilograms. The larger the minimum order quantity Qd, the greater the total annual cost per unit time retailer Z (T), while the lower number of orders Q * and T * the charging cycle