Question

In Materials Requirement Planning, if the inventory holding cost is very high and the setup cost is zero, which one of the following lot sizing approaches should be used?

• A. Fixed Period Quantity, for 2 periods
• B. Lot-for-Lot
• C. Economic Order Quantity
• D. Base Stock Level

Answer 1

The correct option is B Lot-for-Lot

For Lot-for-Lot approach inventory is minimum, hence inventory holding cost is reduced.