Waec Model Questions Vol1 2021 Commerce Question 29

Practice objective / multiple choice question 29 from the 2021 Waec Model Questions Vol1 Commerce examination.

Waec Model Questions Vol1 2021 Commerce Objective / Multiple Choice Hard Difficulty
Question 29 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • COMMERCE • objective

A retailer faces an annual demand of 12,000 units for a product. The ordering cost is ₦8,000 per order. Holding cost is 25% of the unit cost per year. The unit cost is ₦1,200, but a supplier offers a 5% discount on the unit price for any order of 1,500 units or more. The warehouse can store at most 2,000 units. Determine the order quantity that minimises the total annual cost while respecting the storage limit, and compute that minimum total annual cost.

Answer Options

A. Order quantity = 2,000 units; total annual cost = ₦13,800,000
Correct Answer B. Order quantity = 1,500 units; total annual cost = ₦13,957,750
C. Order quantity = 1,500 units; total annual cost = ₦14,500,000
D. Order quantity = 1,200 units; total annual cost = ₦14,200,000
Correct Answer
B
Correct Option:
Order quantity = 1,500 units; total annual cost = ₦13,957,750

About This Question

This is Waec Model Questions Vol1 2021 Commerce Question 29. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

View More Waec Model Questions Vol1 2021 Commerce Questions More Waec Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support