A Profit-Based Model of Integrated Inventory-Production (IPP) Considering Imperfect Quality: A Case Study of Indonesian Food Manufacturing Industry

This study aims to control several decision variables, namely the frequency of ordering raw materials (m), the frequency of delivery of finished products (n), and the production cycle time (T) to maximize the total profit per unit time of the inventory-production integration system. The method used for this study is the optimization of mathematical models with non-linear equations. To optimize the model used MATLAB software by utilizing a genetic algorithm (GA) tool. The output of this research is the proposed policy in managing inventory-production. The results of numerical calculations show that the research model policy provides a better total profit than the company's policies. This research develops the integrated inventory-production (IIP) model considering imperfect quality (products return). Model performance is measured based on the total profit of the inventory-production integration system