The pre-allocation of lot/serial numbered items is a problem as those items cannot be over allocated. Thus if you have 10 in stock and need 20 for a series of MOs, the allocations will fail. You almost need to not allocate on release of the MO and, when the quantity needed for the MO arrives and is about to be issued, allocate at that time, reserving the quantities on hand for the MO. This is not an easy process and requires typically use of the Manufacturing Component Entry window to perform the allocation before issuing the components. If you use some of the scanning systems available, some have an allocate on issue option. (Items MUST be allocated before they can be issued in GP unfortunately.)
As for the lot numbers, lots are not pre-allocated. The allocation on the total quantity is done during the pre-release allocation and, at the time of issue, specific lots can be selected. It is assumed that the actual lot being issued may arrive after release of the MO but before consumption. But then the issued described above gets in the way.