Which of the following statements about quantity discounts is FALSE?
A) The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs.
B) In inventory management, item cost becomes relevant to order quantity decisions when a quantity discount is available.
C) If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule.
D) The larger the annual demand, the less attractive a discount schedule will be.
E) The smaller the ordering cost, the less attractive a discount schedule will be.

Question

Quizplus · Accepted Answer

The statement "The larger the annual demand, the less attractive a discount schedule will be" is false. In fact, larger annual demand can make a discount schedule more attractive as it can lead to greater savings from ordering larger quantities.

Which of the Following Statements About Quantity Discounts Is FALSE