An Information Entropy Approach to the Small-Lot Concept

Just-In-Time and Total Quality Management advocate the use of small lots in production, as they yield higher throughput, better quality, lower response time, less operating expenses, better due date performance, and less work in process. Implementation of the small-lot concept is often resisted by MIS managers and production people who feel that the larger number of lots—the apparently inevitable result of reducing lot size, will entail more information and stronger information technology. By developing a normative model, based on the entropy measurement, this paper claims that the move toward smaller lots implies less information needs. Theorems concerning the relationship between quantity of information and lot size are proved, showing that the new directions that manufacturing is taking entail less information needs.