Neco Model Questions Vol1 2017 Commerce Question 38
Practice objective / multiple choice question 38 from the 2017 Neco Model Questions Vol1 Commerce examination.
A retailer orders a product whose list price is \(\text{₦}1{,}200\) per unit. The supplier offers quantity discounts as follows:\n\n- 5 % discount for orders of at least 100 units,\n- 10 % discount for orders of at least 200 units,\n- 15 % discount for orders of at least 500 units.\n\nThe retailer's annual demand for the product is 2 400 units. The ordering cost is \(\text{₦}5{,}000\) per order and the carrying cost is 20 % per annum of the unit cost (after discount). Assuming the entire demand is met by repeated orders of equal size, determine the order quantity that minimises the total annual inventory cost (ordering plus holding) and state the discount that will be obtained.
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This is Neco Model Questions Vol1 2017 Commerce Question 38. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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