What does OQM mean in LOGISTICS

OQM stands for Order Quantity Multiple.

OQM is calculated by considering factors such as product demand, inventory turnover rate, and lead time. The calculation takes into account maximum order requirements and minimum order requirements to determine the optimal amount of product to be ordered at once.

OQM is important because it allows companies to save money by ordering the optimal amount of product in one batch, reducing excess orders and associated costs. Additionally, it helps companies maintain accurate stock levels that are appropriate for their business needs.

A company can use OQM to help them determine how much product they should order based on their individual business needs and current inventory levels. This consideration helps ensure that businesses are able to keep up with customer demand while keeping costs low.

The main drawback associated with using OQM is that if the quantity multiple chosen is too large, it can lead to an increase in storage costs due to excess products being ordered without demand existing for them. Additionally, if the multiple chosen is too small, then there may not be enough product available when customers want it and businesses could miss out on potential sales opportunities as a result.