Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

Lot-Sizing Techniques

An MRP system is an excellent way to do production planning and determine net requirements. But net requirements still demand a decision about how much and when to order. This decision is called a lot-sizing decision. There are a variety of ways to determine lot sizes in an MRP system; commercial MRP software usually includes the choice of several lot-sizing techniques. We now review a few of them.

Lot-sizing decision

The process of, or techniques used in, determining lot size.

Lot-for-Lot

In Example 3, we used a lot-sizing technique known as lot-for-lot, which produced exactly what was required. This decision is consistent with the objective of an MRP system, which is to meet the requirements of dependent demand. Thus, ...