Gce Model Questions Vol1 2020 Commerce Question 31
Practice objective / multiple choice question 31 from the 2020 Gce Model Questions Vol1 Commerce examination.
A wholesaler faces an annual demand of \(12{,}000\) units. The ordering cost is \(\text{₦}500\) per order. Holding cost is \(20\%\) of the unit cost per year. Unit cost is \(\text{₦}200\) per unit for orders up to \(2{,}000\) units, \(\text{₦}190\) per unit for orders between \(2{,}001\) and \(5{,}000\) units, and \(\text{₦}180\) per unit for orders above \(5{,}000\) units. The warehouse can store at most \(4{,}000\) units at any time. Determine the order quantity that minimises the total annual cost and state that minimum cost (to the nearest naira).
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About This Question
This is Gce Model Questions Vol1 2020 Commerce Question 31. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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