Gce Model Questions Vol1 2023 Commerce Question 21
Practice objective / multiple choice question 21 from the 2023 Gce Model Questions Vol1 Commerce examination.
A wholesaler purchases a product at a unit cost of \(\text{₦}200\). The annual demand is \(12{,}000\) units. The ordering cost per order is \(\text{₦}500\) and the holding cost is \(20\%\) of the unit cost per year. The warehouse can hold at most \(1{,}500\) units at any time. The supplier offers a quantity discount: if the order quantity is \(1{,}000\) units or more, the unit cost falls to \(\text{₦}180\). Determine the order quantity that minimises the total annual cost and state that minimum cost.
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About This Question
This is Gce Model Questions Vol1 2023 Commerce Question 21. It is one of the objective questions from the 2023 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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