Gce Model Questions Vol1 2020 Commerce Question 9

Practice objective / multiple choice question 9 from the 2020 Gce Model Questions Vol1 Commerce examination.

Gce Model Questions Vol1 2020 Commerce Objective / Multiple Choice Hard Difficulty
Question 9 GCE_MODEL_QUESTIONS_VOL1 • 2020 • COMMERCE • objective

A warehouse stores a single product. Annual demand is 12,000 units. Ordering cost per order is \(₦500\). Holding cost is 20% of the unit cost per year, and the unit cost is \(₦200\). The warehouse can hold at most 800 units at any time. Using the EOQ model while respecting the space limit, determine the optimal order quantity, the resulting annual total cost (ordering + holding + purchase), and the reorder point if lead time is 5 days and demand is uniform throughout the year.

Answer Options

Correct Answer A. Order quantity = 548 units; total annual cost ≈ ₦2,421,909; reorder point = 165 units
B. Order quantity = 500 units; total annual cost ≈ ₦2,350,000; reorder point = 150 units
C. Order quantity = 450 units; total annual cost ≈ ₦2,200,000; reorder point = 140 units
D. Order quantity = 600 units; total annual cost ≈ ₦2,500,000; reorder point = 180 units
Correct Answer
A
Correct Option:
Order quantity = 548 units; total annual cost ≈ ₦2,421,909; reorder point = 165 units

About This Question

This is Gce Model Questions Vol1 2020 Commerce Question 9. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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