Neco Model Questions Vol1 2017 Commerce Question 15
Practice objective / multiple choice question 15 from the 2017 Neco Model Questions Vol1 Commerce examination.
A retailer stocks a product in a warehouse. Annual demand is 12,000 units. The ordering cost is ₦(5,000) per order. Holding cost is 20 % of the unit cost per year, and the unit cost is ₦(150). Lead time is 10 days, and daily demand follows a normal distribution with standard deviation 5 units. The retailer desires a 95 % service level. Compute: 1. The Economic Order Quantity (EOQ). 2. The safety stock required for the 95 % service level. 3. The total annual cost (ordering + holding + purchase cost), rounded to the nearest naira.
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About This Question
This is Neco Model Questions Vol1 2017 Commerce Question 15. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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