👉 Lot engineering, also known as lot sizing or lot making, is a process in operations management that involves determining the optimal quantity of materials to order at one time to meet anticipated demand without incurring excessive holding costs or facing stockouts. It aims to balance the trade-offs between ordering costs, which increase with larger order sizes, and holding costs, which rise as inventory levels grow. By analyzing historical demand patterns, lead times, and cost structures, lot engineering seeks to identify the most economical order quantities that minimize total inventory costs while ensuring supply chain responsiveness and efficiency. This strategic approach is crucial for effective inventory management, particularly in industries with variable demand or long lead times.
