ORDER QUANTITY POLICY

Lot Sizing

Also called

Reading time
3 minutes

Lot sizing determines the quantity to purchase or produce in an order or batch. It balances requirements with constraints such as setup effort, holding cost, order multiples, capacity and supply conditions.

LOT SIZING IN PRACTICE

  1. Establish the requirementCalculate the relevant net need and timing.
  2. Apply the policyCheck minimums, multiples and maximums.
  3. Review the consequencesCompare cost, capacity and service.

Use the agreed units, actual records and approved procedures for your operation.

A WORKED EXAMPLE

A net need and an order quantity can differ.

A planner needs 110 units but the agreed ordering multiple is 100. Under a round-up multiple rule, the proposed quantity is 200, subject to the other valid planning constraints.

WHAT THIS MEANS FOR YOUR QUOTE

Agree the requirement before comparing quotes

Use the actual shipment, stock and service requirements. Record the billing unit, included work and responsibility for exceptions.

A LITTLE MORE CONTEXT

Questions about Lot Sizing

Does lot sizing always equal demand?

No. Policy and constraints can change the quantity.

Can order multiples create extra stock?

Yes.

Should conflicting constraints be reviewed?

Yes. Resolve them through an accountable process.

Source & example notes

Oracle: planning order quantities.

Sources provide background on the linked topic. Product documentation describes a particular implementation; confirm the rules, contract and procedures that apply to your operation.

Quantities, costs and scenarios are illustrative, not operating targets, approved handling instructions or guarantees. Source guidance reviewed 23 October 2026.

Last updated: · 3PL Hub

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