Final answer:
Lot size-based quantity discounts can increase the bullwhip effect in the supply chain by incentivizing larger purchases than necessary, exacerbating inventory fluctuations.
The statement is False.
Step-by-step explanation:
Lot size-based quantity discounts can actually increase the bullwhip effect because they incentivize buyers to purchase in larger quantities than needed to obtain a lower price per unit.
This can lead to larger order sizes than what is dictated by consumer demand, resulting in excess inventory and amplified fluctuations in orders up the supply chain. The bullwhip effect refers to the increasing swings in inventory in response to shifts in consumer demand as one moves further up the supply chain.
The statement that lot size-based quantity discounts reduce the bullwhip effect within the supply chain is false.