Which one of the following statements about quantity discounts is best?
A) The minimum cost point on each price curve is always feasible.
B) A price break is the maximum quantity needed to get a discount.
C) If the EOQ for the lowest price is feasible, this is the best lot size.
D) Either price or quantity is sufficient for the search for the best lot size.

Question

Quizplus · Accepted Answer

EOQ (economic order quantity) is the lot size that minimizes total inventory costs, including holding costs and ordering costs. When quantity discounts are available, the EOQ for each discount level should be calculated to determine which one is the most cost-effective. If the EOQ for the lowest price is feasible (meaning it can be ordered and stored within the capacity of the business), then that is the best lot size to order.

Which One of the Following Statements About Quantity Discounts Is