Neco Model Questions Vol1 2025 Commerce Question 49
Practice objective / multiple choice question 49 from the 2025 Neco Model Questions Vol1 Commerce examination.
A warehouse stores a single product. Annual demand is 12,000 units. The ordering cost is ₦8,000 per order. Holding cost consists of a storage charge of ₦2 per unit per year and an insurance charge equal to 0.5 % of the unit value per year. The unit cost is ₦500. The warehouse can hold at most 2,500 units at any time, and a safety stock equal to 10 % of the order quantity must be maintained. Determine the order quantity that minimises total annual cost while satisfying the capacity and safety‑stock requirements, and state the resulting total annual cost (in naira).
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About This Question
This is Neco Model Questions Vol1 2025 Commerce Question 49. It is one of the objective questions from the 2025 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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