A study on the economic production quantity model with partial backorders

This paper is to build an economic production quantity model for situations in which, during the stockout period, a fraction β (backorder ratio) of the demand is backordered and the remaining fraction (1-β) is lost. This paper develops an objective function representing the average annual cost of a production system by defining a time-weighted backorder cost and a lost sales penalty cost per unit lost under the assumptions of deterministic demand rate and deterministic production rate, and provides an algorithm for its optimal solution. At the extreme β=1, the presented model reduces to the Fabrycky’s model with complete backorders. [In Korean.]