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:

Indirect Price Discrimination

A pricing strategy where different prices are charged for the same product or service in different markets or segments, not directly based on customer characteristics but indirectly through product versioning, location, or other non-personal factors.

Different Value Customers

Consumers categorized based on their value or profitability to a business, affecting how they are marketed to and served.

High-End Professional Series

Products or services that are designed and marketed to meet the demands and expectations of professional-grade users, often featuring advanced capabilities and superior quality.

Professional Chefs

Professional chefs are highly skilled and trained individuals who prepare food in restaurants, hotels, and other dining establishments, often specializing in a particular cuisine.