# A-AS Level (CIE) Business Studies Paper-2: Specimen Questions with Answers 12 - 14 of 52

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## Question 12

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### Write in Short

Explain the terms:

a. Segmentation

### Explanation

Market segmentation is the process of dividing a heterogeneous market into homogeneous sub-unit. Example- A firm decided to launch the product for the urban male customer. Market segmentation helps a business in competing in a highly competitive market. A successful marketer, knows that all elements of the marketing mix are imitable. Eventually, competition will catch up and, at the end of the day, it will be a promotion and price war. To be able to overcome this threat from competition, successful marketers always segment their markets, position themselves in a segment, they perceive they will be able to defend against competition attacks and emerge as the segment leader.

## Case Study-7

A company՚s requirement for ten days are 6,300 units. The ordering cost per order is \$ 10 and the carrying cost per unit is \$ 0.26. The following is the dis-countable schedule applicable to the company.

 No. of orders 1 2 3 4 5 6 7 8 9 10 Order in size 6300 3150 2100 1575 1260 1050 900 787.5 700 630 Av. inventory 3150 1575 1050 787.5 630 525 450 393.7 350 315 Carrying cost 819 410 273 205 164 137 117 102 91 82 Order cost 10 20 30 40 50 60 70 80 90 100 Total cost 829 430 303 245 214 297 187 182 181 182 Less: discount 315 189 95 95 63 63 - - - - Total cost after discount 514 241 208 150 151 234 187 182 181 182
 Lot Size Discount per unit (\$) 1 - 9991000 - 14991500 - 24992500 - 49995000-and above 00.0100.0150.0300.050

## Question 13 (1 of 5 Based on Passage)

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### Write in Short

Determine the economic order of the company

### Explanation

The economic order without considering discount is:

## Question 14 (2 of 5 Based on Passage)

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### Write in Short

When should a firm place order to replenish inventory?

### Explanation

The inventory level at which the firm places order to replenish inventory is called the reorder point. It depends on-