Abstract: This paper analyzes the optimal replenishment policy,when a buyer faces imminent price increase under finite horizon.The paper proposes a new method to determine optimal temporary order quantity and analyzes the influences of variable prices on order behavior.Taking the total cost of basic EOQ model as the benchmark,the difference of cost savings between the proposed policy and the other policy in former literature is discussed.The calculation of total inventory cost is more accurate in the paper.The result shows order policy is determined by the increasing extent of price,on-hand inventory and the time horizon.

Key words: replenishment policy, EOQ, finite horizon, price increase