Minimum Order Quantity, the Stage That Sets It & the Cost of a Short Run

How to read this sheet

The minimum order quantity is computed, not chosen. Each stage's minimum is carried forward through every loss downstream of it and divided by the fabric a piece consumes, which puts all of them in the same unit; the largest is the floor. Read the pieces column before arguing with a supplier, because the stage that sets the floor is frequently not the one that gets blamed for it - a yarn lot and a knitting run are visible on contracts and a dye vessel's loading rule is not, so the dyehouse sets the number and the yarn house takes the complaint. The second reading is the one worth acting on. Below the floor the chain has already been committed, so an extra piece costs the conversion plus the recovery value of the cloth it consumes and nothing more, while the average piece is still carrying the whole chain. Those two numbers are far apart, and the gap is the case for going back to the buyer with a larger quantity, or for making the balance into stock, rather than for a surcharge or a refusal. The surcharge is offered here because it is sometimes the only move available, not because it is the best one. Recovery on the surplus is the input that moves everything and it is the one most often assumed. Fabric in a live colour for a repeating programme is worth most of its cost; a buyer-specific print in a dead season is worth nothing, and at zero recovery the marginal piece costs the full fabric and the arithmetic reverses. Put in what it is really worth to you, not what it cost. What this does not do: it takes each stage's minimum as given rather than asking what it would cost to break it, and a smaller vessel at a higher rate per kilogram is often available and frequently cheaper than the surplus it avoids - that is a routing question and a different sheet. It assumes one fabric and one colour; a style split across three colours meets the dye minimum three times and its floor is three times this one, which is the single most common reason a computed floor is understated. It ignores capacity entirely, so an order that is profitable here may still be the wrong order to take when the line is full. And it says nothing about whether the buyer will accept a larger quantity, which is the question the whole sheet exists to make it worth asking.