Waec Model Questions Vol1 2017 Commerce Question 27
Practice objective / multiple choice question 27 from the 2017 Waec Model Questions Vol1 Commerce examination.
A retailer orders a product with an annual demand of 18,000 units. The ordering cost is ₦4,000 per order. The unit cost is ₦500 and the holding cost is 20 % of the unit cost per year. The warehouse can hold at most 1,500 units per order. However, for each unit ordered above 1,000 units a one‑time handling charge of ₦200 per unit is incurred (charged per order). Determine the order quantity that minimises the total annual cost and state that minimum cost.
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About This Question
This is Waec Model Questions Vol1 2017 Commerce Question 27. It is one of the objective questions from the 2017 Waec Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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