The order quantity (also: Lot size, lot or with materials: Load) is the quantity of goods, those

• either in a production process under defined conditions one manufactures,
• or in a common order one buys.

The order quantity indicates thus the quantity of goods, which are ordered at the same time during an order procedure in a business concern.

Example

Mr. Meier for its baker's shop enterprise every 30 days 100kg this 100kg the order quantity is ordered. The order quantity can be of various sizes per order procedure.

Load allocation as quality criterion

Many medical and cosmetic products carry a load designation (shortened CH. - B.). Such a designation is a serial number, on the basis which the manufacturer can assign clearly at a later time, to which production run a product belongs. An example: the messages accumulate themselves up to side effects when using a certain medicine. It is stated that at the consumers concerned the taken medicine has always this-same load designation 38382. An investigation results in that this load was contaminated produced. The pharmacies supplied with this load designation are determined and requested to remove all packing of the medicine with the load designation 38382 from the shelves. Since all other loads are qualitatively perfect, can be further sold this.

Edition-fixed and edition variable costs

For the commercial view between costs independently of the order quantity and variable lot costs one differentiates:

Costs independently of the order quantity: With a purchase or in a production process present-fixed (orderfixed) costs arise. Those are costs, which result for each production process or for each order, but are independent of the order quantity. In order to keep the present-fixed costs as low as possible, as large a lots as possible should be bought or produced. Examples of loose-fixed costs are:

• forwarding expenses with the order of a Warenkorbs in the Versandhandel or
• reequipping a machine.

Variable lot costs: On the other hand also variable lot costs, i.e. stock program costs arise apart from the present-fixed costs. These are costs not only from the number of ordered quantities, but also on the size of the lots and concomitantly the storage time are dependent. In order to keep these costs as small as possible, as small a lots as possible should be bought or produced. Usual variable stock program costs e.g. are.:

• Decrease and decay
• The cost of insurance for the stored goods
• In addition lying goods are bound, probably capital badly put on in stock.

Term lot

The quantity, which is produced without re-equipment on a plant, is a the matter (edition, series)

Further factors of influence

The order quantity depends still on further factors:

• Minimum order quantity
• Utilization of the cargo
• Threatening material bottlenecks

In order to keep the total costs as small as possible, both the loose-fixed, and variable stock program costs must be considered. Small order quantities and frequent orders lead high order costs (no quantity discounts to low storage costs however,"Â…). Large order quantities behave exactly in reverse. In order to determine the optimal lot size, would separate lot size models developed:

The classical lot size model after Harris and ANDLER

see ANDLER formula

The lot size model of Wagner and Whitin

The long-range planning period is divided into discrete periods. The height of the need demand is well-known from each period.

With period-wise production (admitted) setup costs result and the demand from current production or from the stock (no shortfalls) are derived

The Arrow/Harris/Marschak model

EOQ (Economic order Quantity) - model

EOQ++ (EOQ with distortion quantities)

As cost function results from the costs per lot cycle:

K (q, v) = \ frac {b} {q} \ cdot \ left [f+ \ frac {1} {2} \ cdot (q \ cdot (1 \ rho) - v) \ cdot (\ frac {q} {b} - \ frac {v} {p-q} - \ frac {v} {b}) \ cdot+ \ frac {1} {2} \ cdot v \ cdot (\ frac {v} {p-b} + \ frac {v} {b}) \ cdot u \ right] mitv as maximum distortion quantity undu as punishing or shortfall costs of distortion quantities (monetary unit per quantity unit and time unit)

See also

Procurement, procurement logistics, stock management, optimal order quantity

Articles in category "Order quantity"

We found here 7 articles.

Related Websites

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• Economic Order Quantity Definition
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• Optimal Order Quantity Assuming the Component Part Quantity is a ...
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• Optimizing Economic Order Quantity EOQ
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