Question

In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible price.a. trueb. false

Answer 1

Answer: True

Explanation:

A price break is a price reduction especially when one buys in bulk. Price Break model is used when there is variation between the inventory price and the order size.

In a price break model. the economic order quantity is computed for every possible price and matched to the inventory amount available at that price. It can then be used to ascertain if the smallest cost quantity is possible.