Which one of the following statements about lot-sizing rules is TRUE?
A)The periodic order quantity (POQ)rule seeks to create inventory remnants.
B)If the POQ rule is used,an item's lot size can vary each time an order is placed.
C)The lot-for-lot (L4L)rule is a special case of the fixed-order quantity (FOQ)rule.
D)All lot-sizing rules seek to minimize inventory levels.

Question

Quizplus · Accepted Answer

The POQ rule seeks to create consistent order quantities by fixing the ordering frequency and quantity. Therefore, the lot size for an item can vary each time an order is placed. Choice A is incorrect because the POQ rule seeks to avoid inventory remnants. Choice C is incorrect because the L4L rule is a special case of the POQ rule, not the FOQ rule. Choice D is incorrect because some lot-sizing rules, such as the FOQ rule, seek to balance the costs of ordering and holding inventory, rather than solely minimizing inventory levels.

Which One of the Following Statements About Lot-Sizing Rules Is