Gce Model Questions Vol1 2022 Commerce Question 18
Practice objective / multiple choice question 18 from the 2022 Gce Model Questions Vol1 Commerce examination.
A warehouse stores a single product. Annual demand is \(12\,000\) units. The ordering cost per order is \(\text{₦}800\). The holding cost is \(20\%\) of the unit cost per year. The unit cost (in naira) is unknown. The warehouse charges a storage fee of \(\text{₦}2\) per unit per month for any inventory held above \(500\) units at any time. The manager wants to choose an order quantity \(Q\) that minimises the total annual cost (ordering + holding + storage fee) while ensuring that the average inventory never exceeds \(800\) units. If the total annual cost at the optimum is exactly \(\text{₦}48\,000\), determine the optimal order quantity \(Q\) and the corresponding unit cost.
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About This Question
This is Gce Model Questions Vol1 2022 Commerce Question 18. It is one of the objective questions from the 2022 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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