"Managers should always buy inventory in quantities that result in the lowest purchase cost per unit." Do you agree? Explain briefly.

A.No. When deciding on the quantity of inventory to buy, managers must consider both the purchase cost per unit and the opportunity cost of funds invested in the inventory. For example, the purchase cost per unit may be low when the quantity of inventory purchased is large, but the benefit of the lower cost may be more than offset by the high opportunity cost of the funds invested in acquiring and holding inventory.

B.No. When determining how much quantity of inventory to buy, managers must consider both the purchase cost per unit and the objective function. For example, the company must determine if it is their objective to always have a surplus of inventory so that they never encounter a shortage.

C.Yes. It is always desirable to pay the lowest purchase price per unit possible for inventory, with no regards to the quantity that must be bought.

D.Yes. Managers should place one-time-only special orders for large quantities to procure the lowest possible purchase price per unit. The special orders are placed with regards to the lowest price and does not take into account space for storing the inventory.