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)zero or one weeks
B)two or three weeks
C)four or five weeks
D)more than five weeks

Question

Quizplus · Accepted Answer

The POQ rule formula is (D/Q) + (Q-P)/D * P, where D is the demand per period (30 units per week), Q is the lot size (120 units), and P is the lead time in periods.

Setting Q = 120 and solving for P, we have:

(30/120) + (120-P)/30 * P = P/4 + 4 - P/30 * P = 0

Solving for P, we get P = 4.6, which means the lead time should be between four and five weeks. Therefore, choice C is the best option.

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