Waec Model Questions Vol1 2017 Commerce Question 49
Practice objective / multiple choice question 49 from the 2017 Waec Model Questions Vol1 Commerce examination.
A warehouse stores a single product. Annual demand is 12,000 units. The ordering cost (including paperwork and transport) is ₦5,000 per order. The holding cost is 20% of the unit cost per year. The unit cost is ₦250. The warehouse can hold at most 2,000 units at any time. Additionally, a safety stock equal to 10% of the order quantity must be kept. Determine the optimal order quantity that minimizes total annual cost while respecting the storage capacity constraint, and compute the resulting total annual cost (ordering + holding + purchase cost). Give the order quantity (in whole units) and the total cost (in Naira).
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About This Question
This is Waec Model Questions Vol1 2017 Commerce Question 49. It is one of the objective questions from the 2017 Waec Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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