For the lot-sizing technique known as lot-for-lot to be appropriate:
A) future demand should be known for several weeks.
B) setup cost should be relatively small.
C) annual volume should be rather low.
D) item unit cost should be relatively small.
E) the independent demand rate should be very stable.

Question

Quizplus · Accepted Answer

Lot-for-lot is appropriate when setup costs are relatively small. This strategy is best suited for minimizing inventory and avoiding excess cost resulting from large and frequent setups. Lot-for-lot is particularly useful for low-demand items or those that have a stable demand rate. Future demand does not need to be known for several weeks, annual volume does not need to be low, and item unit cost does not have to be small for lot-for-lot to be an appropriate strategy.

For the Lot-Sizing Technique Known as Lot-For-Lot to Be Appropriate