Question

A guitar retailer sells four Gibson Les Pauls and a Fender Telecaster in one week. The manager places an order to Gibson for four Les Pauls and another order to Fender for a single Telecaster. What is the name for this lot ordering technique? Lot-for-lot (L4L) Stock keeping Batch ordering Min-max system

Answer 1

Answer- Lot-for-lot (L4L)

Explanation- L4L is the lot ordering technique wherein the requirements that is required for the specific period is the ordering quantity. In other words, the net requirements for the specified period are the quantity to be ordered. This technique is highly flexible because it depends on the actual demand unlike other ordering techniques. In the scenario, the guitar order was placed based on the actual demand hence it is L4L ordering technique.

Other options-

- Stock keeping- it is the activity of monitoring and controlling the inventory to have sufficient items in stock.

- Batch ordering- as the name indicates the orders are placed in batches.

- Min-max- A minimum order is maintained and reorder takes place before the order reaches below the minimum level. It is also important that a maximum inventory is maintained at the maximum level and the ordering quantity should not be beyond the maximum level.

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