Neco Model Questions Vol1 2022 Commerce Question 18
Practice objective / multiple choice question 18 from the 2022 Neco Model Questions Vol1 Commerce examination.
A retailer orders a product with an annual demand of 12 000 units. The ordering cost is \(\text{₦}2\,500\) per order and the holding cost is 25 % of the unit cost per year. The supplier offers two price tiers: \(\text{₦}150\) per unit for orders of 500 units or less, and \(\text{₦}135\) per unit for orders of 501 units or more. Determine the order quantity that minimises the total annual cost and state that minimum cost (in naira).
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About This Question
This is Neco Model Questions Vol1 2022 Commerce Question 18. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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