When a quantity discount is offered, the first step should be to compute ________.
A) EOQ for the highest price per unit
B) EOQ for the lowest price per unit
C) the total annual cost for the highest quantity discount
D) the total annual cost for the lowest quantity discount

Question

Quizplus · Accepted Answer

In order to take advantage of quantity discounts, we need to find the optimal order quantity that minimizes the total annual cost. Therefore, we should compute EOQ for the lowest price per unit, as this will likely result in the lowest total annual cost.

When a Quantity Discount Is Offered, the First Step Should