Neco Model Questions Vol1 2021 Commerce Question 9

Practice objective / multiple choice question 9 from the 2021 Neco Model Questions Vol1 Commerce examination.

Neco Model Questions Vol1 2021 Commerce Objective / Multiple Choice Hard Difficulty
Question 9 NECO_MODEL_QUESTIONS_VOL1 • 2021 • COMMERCE • objective

A company stores three categories of items A, B and C. Their annual demands are \(5\,000\), \(12\,000\) and \(20\,000\) units respectively. The unit holding‑cost rates are ₦5, ₦3 and ₦2 per unit per year. The ordering cost per order is the same for all categories: ₦1 500. The company wishes to apply the EOQ model to each category separately, but the total annual ordering cost for all categories combined must not exceed ₦10 000. Determine feasible order quantities (rounded to the nearest whole unit) for each category that satisfy the constraint while minimising total annual holding cost, and give the resulting total annual cost (excluding purchase cost) in naira.

Answer Options

A. Q_A=2500, Q_B=5000, Q_C=8000; total cost ≈ ₦34000
B. Q_A=2700, Q_B=5400, Q_C=8100; total cost ≈ ₦31500
Correct Answer C. Q_A=2600, Q_B=5200, Q_C=8200; total cost ≈ ₦32500
D. Q_A=2600, Q_B=5200, Q_C=8200; total cost ≈ ₦35000
Correct Answer
C
Correct Option:
Q_A=2600, Q_B=5200, Q_C=8200; total cost ≈ ₦32500

About This Question

This is Neco Model Questions Vol1 2021 Commerce Question 9. It is one of the objective questions from the 2021 Neco Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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