Neco Model Questions Vol1 2024 Economics Question 10
Practice objective / multiple choice question 10 from the 2024 Neco Model Questions Vol1 Economics examination.
A firm needs to transport 500 tonnes of goods each month from Lagos to Kano. It can choose either road or rail. Road transport costs a fixed \(\mathrm{N}20{,}000\) per shipment plus \(\mathrm{N}150\) per tonne, and arrives on time 90 % of the time. Rail transport costs a fixed \(\mathrm{N}35{,}000\) per shipment plus \(\mathrm{N}80\) per tonne, and arrives on time 98 % of the time. For each tonne that is delayed, the firm incurs a penalty of \(\mathrm{N}200\). Determine which mode of transport minimises the firm's total expected monthly cost and state that minimum cost.
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About This Question
This is Neco Model Questions Vol1 2024 Economics Question 10. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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