MRP results in signals the planners can respond to, according to the calculation resulting from inputs and outputs. When a requirement is determined for a particular component, one of the first questions the planner has to answer is how many of this component to order. Sometimes the decision is easy (for example, only the number to match requirements), but other times it is not as simple. Consider, for example, a situation where an inexpensive item is purchased from a supplier located thousands of miles away. If the requirement is for stainless steel bolts at a quantity of 17 per assembly with a price of 30 cents each and the source for these bolts is China, what is the right quantity to purchase? The answer, even given the data of price and source, is still it depends. It depends on inventory strategy of the item and the upper level requirements, and it depends on anticipated usage beyond any known history. Order policy begins to address the issues and answer the question How many should we order? There are a few types of order policies that are used often and one (economic order quantity) that is not but occasionally gets press time:

1. One for one This is the just-in-time, lean, kanban approach. No extra are ordered, and nothing is ordered until there is a customer demand that creates a requirement. If 17 are needed, only 17 will be ordered. This approach is used in an engineer-to-order (ETO) or...