Waec Model Questions Vol1 2022 Commerce Question 3

Practice objective / multiple choice question 3 from the 2022 Waec Model Questions Vol1 Commerce examination.

Waec Model Questions Vol1 2022 Commerce Objective / Multiple Choice Hard Difficulty
Question 3 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • COMMERCE • objective

A retailer has an annual demand of 12,000 units for a product. The ordering cost per order is ₦8,000. The unit cost is ₦2,500 and the holding cost is 15% of the unit cost per year. The warehouse can store at most 1,200 units at any time. Determine the order quantity that minimises total annual cost while respecting the storage limit, and compute the resulting total annual cost.

Answer Options

A. Order quantity = 716 units; Total annual cost = ₦31,000,000
B. Order quantity = 800 units; Total annual cost = ₦31,500,000
Correct Answer C. Order quantity = 716 units; Total annual cost = ₦30,268,322
D. Order quantity = 650 units; Total annual cost = ₦29,800,000
Correct Answer
C
Correct Option:
Order quantity = 716 units; Total annual cost = ₦30,268,322

About This Question

This is Waec Model Questions Vol1 2022 Commerce Question 3. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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