Item: AB$521$

Lead Time: $2$ Weeks

Lot size rule: Period Order Quant $($POQ$)$:

$3$

Parent: AB$500$

Usage Factor:

$3$

Children: None

Gross Requirements

Scheduled Receipts

Planned Order Receipts

Projected Available: $1900$

Planned Orders

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For periodic order quantity $($POQ$)$:

When calculating the first planned order quantity, subtract the projected inventory level from the demand over the next $n$ periods. Use that quantity as the POQ.

Example:

A replenishment order of $100$ is needed to satisfy the demand for the next $3$ periods. If $10$ items are left from the initial inventory, subtract the $10$ items and order $90($i$.$e$.,$ POQ$=100-10=90).$ At the end of the demand period, there should be no items left in inventory. This minimizes the number of items carried in inventory.