Also, customer is using a serial/lot tracked parent, one lot per production order with multiple component lots per order. So for a shop order lot size = 5 with one component part A with a QPA =1, and (3) of part A reserved from Lot 1 and (2) reserved from Lot 2. What determines to which parent serial each one of the Lot 1 parts and each one of the Lot 2 partsgets assigned to?

If the site is set to auto build tracked structures, you might no need to worry about the which lot goes to which parent.

But, I believe the track structure will build in the order of your reservation of component parts. The first component lot that you reserve will connect with the first serial parent in your case.  

If you auto reserve all material, I believe it is the auto reserve logic and again first come first serve basis.

But, if you are not satisfied with the track structure you alway can build manually.

If the site is set to auto build tracked structures and still you need a bit more control on the build tracked structures, I suggest that you manually reserve component parts in the order of what you want.