Which lot sizing rule bases the order quantity on a standard-size container or pallet load?
A) Lot-for-lot (LFL) rule
B) Fixed-order quantity (FOQ) rule
C) Periodic-order quantity (POQ) rule
D) Gross requirements (GR) rule

Question

Quizplus · Accepted Answer

The Fixed-order quantity (FOQ) rule bases the order quantity on a standard-size container or pallet load. The FOQ rule is used when there is a fixed cost for each order placed, and it is more economical to order in larger quantities. The lot-for-lot (LFL) rule orders exactly what is needed for a given period, the periodic-order quantity (POQ) rule orders the same quantity every period regardless of the actual demand variation, and the gross requirements (GR) rule calculates the total demand for a given period without considering inventory on hand.

Which Lot Sizing Rule Bases the Order Quantity on a Standard-Size