Part Period Algorithm

The objective of inventory management is to maintain optimum levels of inventory consistent with customer demands and plant capacity. Management must determine: -What to order When to order How much to order Still, This is not an easy task, for there are many conflicting goals. management must inevitably make a decision to order what it considers to be economical. The determination of an economic ordering quantity is commonly referred to as "Lot-Sizing". Calculations of the size of an order yield to the total cost as composed of the following elements: -Ordering costs, including setup -Inventory holding costs.