Neco 2023 Commerce Question 40

Practice objective / multiple choice question 40 from the 2023 Neco Commerce examination.

Neco 2023 Commerce Objective / Multiple Choice Hard Difficulty
Question 40 NECO • 2023 • COMMERCE • objective

A warehouse handles a single product with an annual demand of 9,600 units. The ordering cost per order is \u00a5 1,200 and the unit cost is \u00a5 250. Holding cost is 15% of the unit cost per year. Lead time is 10 days and daily demand variability has a standard deviation of 8 units. For a 95% service level (Z = 1.645), determine: (a) the Economic Order Quantity (EOQ), (b) the safety stock, and (c) the reorder point (ROP).

Answer Options

A. EOQ ≈ 750 units; Safety stock = 50 units; Reorder point = 313 units
B. EOQ ≈ 820 units; Safety stock = 45 units; Reorder point = 320 units
Correct Answer C. EOQ \approx 784 units; Safety stock = 42 units; Reorder point = 305 units
D. EOQ ≈ 800 units; Safety stock = 35 units; Reorder point = 298 units
Correct Answer
C
Correct Option:
EOQ \approx 784 units; Safety stock = 42 units; Reorder point = 305 units

About This Question

This is Neco 2023 Commerce Question 40. It is one of the objective questions from the 2023 Neco Commerce examination.

Difficulty level: Hard .

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