Which of the Following Statements About Quantity Discounts Is False

question 37

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 inventory decisions only 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:

Best-fitting Regression Line

A line through a scatter plot of data points that best expresses the relationship between those points, typically found using least squares regression.

Slope

The slope is a measure of the steepness or incline of a line, defined as the ratio of the change in the y-value over the change in the x-value between two points on the line.

Regression

A statistical method used to model the relationship between a dependent (target) variable and one or more independent (predictor) variables.

Correlation Coefficient

A numeral measure of the strength and direction of the linear relationship between two quantitative variables.