Waec Model Questions Vol1 2017 Commerce Question 1

Practice objective / multiple choice question 1 from the 2017 Waec Model Questions Vol1 Commerce examination.

Waec Model Questions Vol1 2017 Commerce Objective / Multiple Choice Hard Difficulty
Question 1 WAEC_MODEL_QUESTIONS_VOL1 • 2017 • COMMERCE • objective

A retailer has an annual demand of 12,000 units for a product. The ordering cost is ₦500 per order and the holding cost is 10% of the unit cost. The unit cost is ₦200. Lead time is 5 days and daily demand during lead time is uncertain with an average of 30 units and a standard deviation of 5 units. For a 95% service level (z = 1.65), determine (a) the Economic Order Quantity (EOQ) and (b) the reorder point (including safety stock). Also state the total annual cost (ordering + holding) based on the EOQ and safety stock.

Answer Options

Correct Answer A. EOQ ≈ 775 units; Reorder point = 169 units; Total annual cost ≈ ₦15,870
B. EOQ ≈ 720 units; Reorder point = 170 units; Total annual cost ≈ ₦15,300
C. EOQ ≈ 800 units; Reorder point = 165 units; Total annual cost ≈ ₦16,200
D. EOQ ≈ 750 units; Reorder point = 175 units; Total annual cost ≈ ₦15,500
Correct Answer
A
Correct Option:
EOQ ≈ 775 units; Reorder point = 169 units; Total annual cost ≈ ₦15,870

About This Question

This is Waec Model Questions Vol1 2017 Commerce Question 1. It is one of the objective questions from the 2017 Waec Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

View More Waec Model Questions Vol1 2017 Commerce Questions More Waec Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support