# MRP Lot Sizing Rules: Which One Fits (Reference Table) > Source: https://netray.co/tools/lot-sizing-rule-selection-reference > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer A comparison table of the common MRP lot sizing rules, how each sizes an order, when it fits and what to watch for. ## Category supply-chain ## Audience - Production planner - Inventory manager - ERP consultant ## Tool **Kind:** worksheet **Mode:** reference **Columns:** #### Lot sizing rule **Key:** rule **Type:** text #### Also called **Key:** other **Type:** text #### How it sizes an order **Key:** how **Type:** text #### Best fit **Key:** fits **Type:** text #### Watch out for **Key:** watch **Type:** text **Rows:** **Rule:** Lot for lot **Other:** L4L, discrete, as required **How:** Order equals the net requirement of each bucket **Fits:** Expensive, high-value, make-to-order or low-volume items **Watch:** Many small orders where setup or order cost is high **Rule:** Fixed order quantity **Other:** FOQ, fixed lot size **How:** Always the same quantity, repeated until the shortage is covered **Fits:** Items with a natural batch, container or tooling size **Watch:** Surplus when the requirement is much smaller than the lot **Rule:** Economic order quantity **Other:** EOQ, Wilson formula **How:** Quantity from sqrt(2 x annual demand x order cost / holding cost per unit) **Fits:** Steady, independent demand with stable cost data **Watch:** Assumes constant demand, which dependent demand rarely is **Rule:** Periodic order quantity **Other:** POQ, period order quantity **How:** Covers the net requirements of a fixed number of buckets in one order **Fits:** Dependent demand where an order interval is easier than a quantity **Watch:** Interval must be reviewed when demand changes level **Rule:** Fixed period requirements **Other:** Fixed period, weekly or monthly grouping **How:** Groups all requirements within a calendar period into one order **Fits:** Suppliers who ship weekly, or monthly buying cycles **Watch:** Early arrival of later requirements raises stock **Rule:** Min-max or reorder level **Other:** Order-up-to, replenish to max **How:** When stock falls to the minimum or reorder level, order up to the maximum **Fits:** Low-value consumables, indirect materials, bin replenishment **Watch:** Reactive to stock, not driven by BOM demand **Rule:** Minimum order quantity **Other:** MOQ, minimum lot size **How:** Order is at least the minimum, otherwise the net requirement **Fits:** Vendors with a minimum purchase quantity **Watch:** Often combined with a rounding multiple **Rule:** Maximum order quantity **Other:** Maximum lot size **How:** Caps order size and splits larger needs into several orders **Fits:** Capacity, tank, oven or machine batch limits **Watch:** May create several orders on the same day **Rule:** Rounding multiple **Other:** Order multiple, rounding value **How:** Rounds the order up to a multiple of a unit such as a pallet **Fits:** Packaged goods, pallets, bar stock lengths **Watch:** Rounding adds surplus on small requirements **Rule:** Part period balancing **Other:** PPB, part-period algorithm **How:** Combines future buckets while holding cost stays near the setup cost **Fits:** Lumpy dependent demand with known setup and holding cost **Watch:** Needs reliable cost data and recalculation when costs change **Rule:** Least unit cost **Other:** LUC **How:** Extends the order while cost per unit keeps falling **Fits:** Items where setup and holding cost are known **Watch:** Can overshoot the true optimum **Rule:** Least total cost **Other:** LTC **How:** Chooses the number of buckets where holding cost is closest to setup cost **Fits:** Similar to part period balancing **Watch:** Heuristic, not guaranteed optimal **Rule:** Silver-Meal heuristic **Other:** Least period cost **How:** Extends the order while average cost per period keeps falling **Fits:** Time-varying demand where simplicity matters **Watch:** Heuristic, may stop early if demand has later peaks **Rule:** Wagner-Whitin **Other:** Dynamic programming lot sizing **How:** Finds the lowest total setup plus holding cost over the whole horizon **Fits:** Small number of high-value items with stable cost inputs **Watch:** More computation, and small demand changes can reshuffle the plan **Notes:** Cost-based rules need setup and holding cost inputs. Many ERPs only offer a subset, so check which rules your system supports before choosing. ## Content **Intro:** Choosing the wrong lot sizing rule creates either too many small orders or too much stock. This table summarises the common rules so a planner can pick one by item behaviour rather than by habit. **Sections:** #### How to choose a rule **Body:** Start with the cost of an order against the cost of holding stock. If setup or order cost is tiny, lot for lot is usually right. If a vendor or process imposes a fixed batch or multiple, use fixed quantity with rounding. For steady items with stable cost data, EOQ or a periodic interval works. For lumpy demand with real setup cost, use periodic or a cost-balancing heuristic. Search by your item type in the table to see the closest match. #### Quantity rules versus interval rules **Body:** Quantity rules such as fixed and EOQ decide how much to order. Interval rules such as periodic and fixed period decide how many buckets of demand one order covers. Interval rules follow dependent demand better because the order quantity floats with the requirement. Limits such as minimum, maximum and rounding can be layered on top of either family. #### Common mistakes **Body:** Planners often copy one rule across a whole item class without checking cost data. **Bullets:** - Using EOQ on lumpy dependent demand. - Setting a fixed lot far larger than the typical requirement. - Forgetting that a rounding multiple adds surplus. - Leaving cost-based rules on after setup costs changed. - Never reviewing the rule when demand level shifts. **Cta:** If you want lot sizing suggestions tested against your real demand history, we can discuss running that analysis read-only on your ERP data. **Faq:** #### What is the simplest lot sizing rule? **Answer:** Lot for lot is the simplest: each order equals the net requirement of one bucket. It keeps inventory minimal but creates the most orders, so it suits items with low setup or order cost, or items that are expensive to hold. #### When is EOQ a poor choice? **Answer:** EOQ assumes constant independent demand. For components whose demand comes from lumpy parent orders it can create stock that sits for months. Periodic or cost-balancing rules usually serve those items better. #### Can I combine rules? **Answer:** Yes. A base rule such as lot for lot or periodic is often combined with a minimum quantity, a maximum quantity and a rounding multiple. Many ERPs expose these as separate fields on the item planning data. #### How often should lot sizes be reviewed? **Answer:** Review when demand level, setup cost, supplier terms or holding cost change materially, and as a routine at least once or twice a year for high-value items. Stale lot sizes are a frequent hidden source of excess inventory. ## Search terms mrp lot sizing rules, lot sizing techniques, periodic order quantity vs eoq, part period balancing, silver meal heuristic, which lot size rule to use, wagner whitin lot sizing, lot sizing comparison table --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json