Neco Model Questions Vol1 2020 Commerce Question 46
Practice objective / multiple choice question 46 from the 2020 Neco Model Questions Vol1 Commerce examination.
An electronics retailer faces an annual demand of \(12{,}000\) units for a gadget. The ordering cost is \(\text{₦}500\) per order. The holding cost is 20 % of the unit cost per year. The unit cost depends on the order quantity as follows:\n\n- up to 500 units: \(\text{₦}200\) each\n- 501 to 1{,}000 units: \(\text{₦}190\) each\n- more than 1{,}000 units: \(\text{₦}180\) each\n\nThe lead time is 2 weeks and the retailer keeps a safety stock of 100 units.\n\n(a) Determine the order quantity that minimises the total annual cost (purchase + ordering + holding).\n(b) Using that order quantity, calculate the reorder point (in units).
Answer Options
About This Question
This is Neco Model Questions Vol1 2020 Commerce Question 46. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
Master the Exam!
You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.