When the economic order quantity results in not taking quantity discounts, the foregone discount is an opportunity cost and needs to be considered in the decision-making process.

Question

Quizplus · Accepted Answer

This is true because by not taking advantage of the quantity discount, the company is forfeiting the savings they would otherwise receive. This missed opportunity should be taken into account as an opportunity cost in the decision-making process.

When the Economic Order Quantity Results in Not Taking Quantity