What is Lot Size in Retail? Explained

Lot Size in retail signifies the quantity of a specific product or SKU (Stock Keeping Unit) ordered or received by a retailer in a single shipment from a supplier. This aspect is pivotal in inventory management, with retailers considering factors such as demand forecasts, storage capacity, and ordering costs when determining the appropriate lot size. Striking the right balance in lot sizes helps prevent stockouts or overstock situations, enabling businesses to meet customer demand efficiently while minimizing holding costs.