Question

Planning orders using a lot-for-lot (L4L) technique is commonly done because it is simple and intuitive. It also helps to minimize holding costs as you are only ordering what is needed when it is needed. So far it sounds like a good idea. Are there any disadvantages to this approach?

Short answer

Lot-for-lot (L4L) is otherwise called discrete request amount. It is a regularly involved method for arranging orders.

Step-by-step solution

Lot-for-lot (L4L)

Lot-for-lot is the interaction where the quantity of merchandise requested for the creation and the gross need happen for a given period. These strategies are normally utilized for expensive products whose request is nonstop.

Disadvantages of lot-for-lot (L4L)

1. There is no limit to creation in L4L.
2. This strategy does not get the beginning up cost.