Which of the Following Statements About Quantity Discounts Is FALSE

question 151

Multiple Choice

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.

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Definitions:

Standard Deviation

An indicator of the degree to which a dataset's values vary or are spread, showing the distance of the values from the average.

Probability

The measure or quantification of how likely an event is to occur, expressed as a number between 0 (impossible) and 1 (certain).

NORM.DIST

A function in statistics that returns the normal distribution for a specified mean and standard deviation.

Standard Error

The standard deviation of the sampling distribution of a statistic, often used to estimate the precision of a sample mean.