Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

11.4 Batch Sizing, or Lot Sizing

Intended learning outcomes: Produce an overview on production or procurement costs, batch-size-dependent unit costs, setup and ordering costs, and carrying cost. Explain optimum batch size, optimum length of order cycle, the classic economic order quantity formally and in practical application. Disclose extensions of the batch size formula.


Batch sizing, or lot sizing, is the process of, or techniques used in, determining batch or lot size ([APIC16]).

Course section 11.4: Subsections and their intended learning outcomes

  • 11.4.4 Extensions of the Batch Size Formula

    Intended learning outcomes: Identify additional variables for lead-time-oriented batch sizing. Present lead-time-oriented batch sizing. Describe total costs curves, considering discount levels. Produce an overview on joint replenishment: kit and collective materials management.


Course 11: Sections and their intended learning outcomes

  • 11.3 Order Point Technique and Safety Stock Calculation

    Intended learning outcomes: Explain the order point technique and variants thereof. Describe the safety stock calculation with continuous demand. Disclose the determination of the service level and the relation of service level to fill rate.

  • 11.4 Batch Sizing, or Lot Sizing

    Intended learning outcomes: Produce an overview on production or procurement costs, batch-size-dependent unit costs, setup and ordering costs, and carrying cost. Explain optimum batch size, optimum length of order cycle, the classic economic order quantity formally and in practical application. Disclose extensions of the batch size formula.

  • 11.5 Summary

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  • 11.6 Keywords

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  • 11.7 Scenarios and Exercises

    Intended learning outcomes: Calculate examples for the ABC Classification and for the combined ABC-XYZ classification. Differentiate between Safety Stock Variation and Demand Variation. Determine batch size depending on stockout costs. Assess the effectiveness of the order point technique.

  • 11.8 References

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