Design Details: Lot-for-Lot
The lot-for-lot policy is the most flexible because the system only reacts on actual demand, plus it acts on anticipated demand from forecast and blanket orders and then settles the order quantity based on the demand. The lot-for-lot policy is aimed at A- and B-items where inventory can be accepted but should be avoided.
In some ways, the lot-for-lot policy looks like the Order policy, but it has a generic approach to items; it can accept quantities in inventory, and it bundles demand and corresponding supply in lot accumulation periods defined by the user.
The Lot Accumulation Period field contributes to define the company's reorder cycle together with the Rescheduling Period field. From the date of the first demand, all demands are accumulated in the following lot accumulation period into one supply order, which is placed on the date of the first demand. Demand that is outside the lot accumulation period is not covered by the supply order.
The lot-for-lot policy can also include a dampener period and dampener quantity to reduce order rescheduling.
Because the supply order quantity is based on the actual demand it can make sense to use the order modifiers: round the order quantity up to meet a specified order multiple (or purchase unit of measure), increase the order to a specified minimum order quantity, or decrease the quantity to the specified maximum quantity (and thus create two or more supplies to reach the total needed quantity).
See Also
Concepts
Design Details: Planning Parameters
Other Resources
Design Details: Reordering Policies
Design Details: Handling Reordering Policies
Design Details: Supply Planning