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.

Reducing the fixed cost associated with each lot directly impacts the overall cost of production without increasing the costs when reducing lot sizes. Fixed costs are expenses that do not change with the volume of production, such as machinery or setup costs. By minimizing these, companies can produce smaller lots more economically, thus achieving flexibility and efficiency without a corresponding increase in cost.