Gce Model Questions Vol1 2022 Commerce Question 10

Practice objective / multiple choice question 10 from the 2022 Gce Model Questions Vol1 Commerce examination.

Gce Model Questions Vol1 2022 Commerce Objective / Multiple Choice Hard Difficulty
Question 10 GCE_MODEL_QUESTIONS_VOL1 • 2022 • COMMERCE • objective

A warehouse can either store goods for an average of 15 days, incurring a holding cost of ₦0.12 per unit per day, or use a cross‑docking system that eliminates storage but incurs a handling cost of ₦0.30 per unit. The product's annual demand is 200,000 units. (a) Calculate the annual cost difference between the two options and state which option is cheaper. (b) Determine the break‑even average holding period (in days) at which the holding‑cost option and the cross‑docking option would cost the same.

Answer Options

Correct Answer A. Cross‑docking cheaper by ₦300,000; break‑even holding period = 2.5 days
B. Cross‑docking cheaper by ₦300,000; break‑even holding period = 5 days
C. Cross‑docking cheaper by ₦150,000; break‑even holding period = 4 days
D. Cross‑docking cheaper by ₦350,000; break‑even holding period = 2 days
Correct Answer
A
Correct Option:
Cross‑docking cheaper by ₦300,000; break‑even holding period = 2.5 days

About This Question

This is Gce Model Questions Vol1 2022 Commerce Question 10. It is one of the objective questions from the 2022 Gce Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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