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
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