What lot-sizing technique is generally preferred when inventory holding costs are extremely high?
A) lot-for-lot
B) EOQ
C) part-period balancing
D) the Wagner-Whitin algorithm
E) quantity discounting

Question

Quizplus · Accepted Answer

When inventory holding costs are extremely high, companies typically prefer to minimize their inventory on hand. Lot-for-lot is a lot-sizing technique that minimizes inventory by producing only what is necessary to meet current demand. This technique helps reduce the risk of overproduction and excess inventory, thereby minimizing holding costs.

What Lot-Sizing Technique Is Generally Preferred When Inventory Holding Costs