DYNAMIC LOT SIZING MODEL FOR RETAILERS WITH MULTI SUPPLIER, QUANTITY DISCOUNTSAND CAPACITY CONSTRAINS

Abstract

Onderhoud is a Small Medium Enterprises (SMEs) engaged in the field of custom shoes
production services. Nowadays the company spends a large amount of money on ordering a
leather raw material from suppliers. Orders are made to several suppliers every time there is an
order. The swelling of production costs was identified due to the amount of the cost of the order
made by the company. To reduce production costs, companies need to plan production by
determining the optimal order lot to minimize overall production costs. Another limitation that is
owned by the company is the production capacity, where in one period (one week) the company
is only able to produce 15 units of shoes. In this research, the development of models from preexisting models is carried out to determine the optimal lot order that must be done by the
company. The test results show that the developed model is able to solve the problems faced by
the company. Based on the results of testing the data, it can be seen that by using a plan that is
carried out using the results of the development model, the company can increase profits by
1.47% compared to using the current ordering method.