Raw material economic ordering and product pricing policy

The demand rate of products of a production system is influenced by the sale price. The raw material economic ordering quantity is affected by the product's demand rate. This paper studies the problem of how the enterprise determines its raw material economic ordering quantity and products' sale price in order to get the maximum net profit. This paper mainly considers this problem for only one kind of product. If there are several kinds of products, the problem can be solved by the proposed method for every kind of products. It is also pointed out that the method is suitable for commercial enterprises.