A key to reducing lot size without increasing costs

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25. A key to reducing lot size without increasing costs is to a. reduce the holding cost associated with each lot. b. reduce the fixed cost associated with each lot. c. reduce the material cost associated with each lot. d. reduce the manufacturing cost associated with each lot. e. increase the holding cost associated with each lot. Answer: b Difficulty: Moderate 26. A price discount where the pricing schedule offers discounts based on the quantity ordered in a single lot is 27. A price discount where the discount is based on the total quantity purchased over a given period, regardless of the number of lots purchased over that period is 28. Pricing schedules with all unit quantity discounts encourage retailers to
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Difficulty: Moderate 29. In the pricing schedule for marginal unit quantity discounts a. the average cost of a unit decreases at a breakpoint. b. the average cost of a unit increases at a breakpoint. c. the marginal cost of a unit decreases at a breakpoint. d. the marginal cost of a unit increases at a breakpoint. e. the average cost and the marginal cost of a unit decrease at a breakpoint. Answer: c Difficulty: Moderate 30. Quantity discounts lead to 31. For commodity products where price is set by the market, manufacturers can use lot size based quantity discounts to
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