Q-4 In the basic EOQ model, the variable Material Cost C does not change. Therefore, we focus only on the Total Relevant Cost, equal to the sum of the Ordering Cost and the Holding Cost.

In contrast, in the Quantity Discount model, the variable Material Cost C also changes, and therefore we need to focus on the Total Cost, equal to the sum of the Material Cost, the Ordering Cost, and the Holding Cost.

Group of answer choices

True

False

Q-5 When Quantity Discounts are being offered, we should always pick the Quantity which has the lowest Material Cost.

Group of answer choices

True

False

Q-6 When calculating the EOQ with Quantity Discounts, the calculated EOQ for a particular price band may fall outside the quantity range applicable for that price band.

Group of answer choices

True

False

Q-7 A discount online grocery store is running a promotion on seltzer water packs. If you buy 1-10 packs, they cost $5 each. If you buy 11-25 packs, they cost $4 each. And if you buy 26 packs or more, they cost $3 each.

When evaluating the EOQ at the $4 cost level, you found the EOQ to be 9 packs. If you want to get this low price of $4 and still keep your total costs as low as possible, what is the number of packs that you should order?

Group of answer choices

9

10

11

25