Management wishes to use a POQ lot- sizing rule for an item that experiences an average demand of 30 units per week. If the desired average lot size is 120 units, what should P be?
A) 0 or 1 weeks
B) 2 or 3 weeks
C) 4 or 5 weeks
D) More than 5 weeks

Question

Quizplus · Accepted Answer

The Period Order Quantity (POQ) is calculated by dividing the desired lot size by the average demand. Here, 120 units divided by 30 units per week equals 4 weeks. Thus, P should be 4 weeks.

Management Wishes to Use a POQ Lot- Sizing Rule for an Item