What Is a Lot Size Rule in Replenishment Planning?

A lot size rule decides how a raw replenishment quantity is rounded into a practical order size, from the exact shortfall to whole standard batches. When the planning system computes that stock is short by some amount, the lot size rule translates that raw need into a quantity you can actually order or build. Lot-for-lot orders precisely what is missing; fixed order quantity rounds up to whole multiples of a defined lot. The rule reflects a physical fact about the item: whether it comes in any quantity or only in fixed batches.

This entry defines the lot size rule and shows how it behaves inside EDGEBIC by User Solutions. For the wider index of planning terms, see the manufacturing glossary, and for the recommendation the rule shapes, see the replenishment suggestion.

How it works

The two common rules map onto two everyday buying habits. Lot-for-lot is buying exactly the number of eggs the recipe calls for, no rounding up to a full carton. Fixed order quantity is buying sheet metal that only comes in standard four-by-eight-foot sheets, so you order in full-sheet multiples whether or not you need a whole sheet. Both are correct; which one fits depends on how the item is actually supplied.

The rule is applied at a specific point in sizing a suggestion:

1. The system computes the raw shortfall, the quantity needed to bring the projected balance back to target.
2. The lot size rule rounds that raw need. Lot-for-lot leaves it exact. Fixed order quantity rounds up to the next whole multiple of the reorder quantity.
3. Yield inflation, if the product has scrap, is applied last, scaling the rounded figure up so the net good output still meets the target.

Order matters here: rounding to whole lots happens before yield inflation, so the two adjustments can stack and push a suggestion above the raw need. That is intended. The lot size rule shapes only the quantity, never the timing; the due date and start date of a firmed order come from the triggering bucket and the product's lead time.

A concrete example

A make-to-stock bracket needs replenishing. The raw shortfall in the triggering bucket is 290 units. The reorder quantity is 200 and the yield is a perfect 1.0.

• Under lot-for-lot: the suggestion is exactly 290. No rounding, no surplus.
• Under fixed order quantity with a lot of 200: 290 rounds up to the next whole multiple, which is two lots, or 400. You carry the 110-unit surplus because the bracket is only produced in 200-piece runs.

Now add scrap. Take a casting with a raw need of 360, a fixed lot of 100, and a yield of 90 percent. Fixed order quantity rounds 360 up to 400, four whole lots. Yield inflation then scales 400 up by dividing by 0.9, giving 445 after rounding. The final suggested quantity is 445, a figure that can sit above the maximum target because both the batch rounding and the scrap buffer add to it. Starting 445 and losing 10 percent to scrap lands roughly at the 400 of good units the plan wanted.

How EDGEBIC uses it

In EDGEBIC, the lot size rule is a per-product setting with two active choices, lot-for-lot and fixed order quantity, that the replenishment calculation applies when sizing a suggestion on the Inventory Calendar. A fixed-order-quantity product uses its reorder quantity as the rounding lot, so every suggestion emerges as whole batches. A lot-for-lot product suggests the exact shortfall. In both cases, yield inflation is applied afterward when the product has a yield below one, keeping the two adjustments in the correct order.

The rule lives alongside the other replenishment attributes on the product, so changing it takes effect on the next calendar refresh with no rebuild. When a planner firms a suggestion, the rounded and yield-adjusted quantity becomes the order quantity, rounded up to a whole number, while the due date and start date come from the bucket and the product's lead time rather than from the lot rule.

To set the rule step by step, follow the how-to for setting a lot size rule in EDGEBIC. For the full replenishment calculation with lot sizing and yield worked through, read EDGEBIC forecasting and replenishment explained. To understand the trigger levels that create the raw need in the first place, continue with safety stock in manufacturing.