Which lot sizing rule is best when inventory carrying costs are high and setup/order costs are low?
A) Lot-for-lot (LFL)
B) Fixed-order quantity (FOQ)
C) Periodic-order quantity (POQ)
D) Gross requirements (GR)

Question

Quizplus · Accepted Answer

Lot-for-lot (LFL) sizing is best when inventory carrying costs are high and setup/order costs are low because it minimizes inventory levels by ordering only what is needed for production or sales, thus reducing carrying costs.

Which Lot Sizing Rule Is Best When Inventory Carrying Costs