Period order quantity is a lot-sizing technique under which the lot size is equal to the net requirements for a given number of periods. (Period order quantity (POQ), A lot-size technique that orders to cover requirements for a variable number of periods based on order and holding costs, as opposed to a fixed period quantity that uses a standard number of periods.)

Calculation of Period Order Quantity

When an order is placed it covers the requirements of 3 weeks.

Disadvantages of POQ

  • If there is an unexpected variation of demand for an item at the end of the usage period, there will be a chance of increasing the risk of unavailable.
  • When demand for the usage has been reduced or ended, there will be a chance of continuing supplier deliveries because of the lack of tracking records for these goods

Get more definitions about Period order quantity and other ERP related terms here.

   

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