Waec Model Questions Vol1 2021 Commerce Question 44

Practice objective / multiple choice question 44 from the 2021 Waec Model Questions Vol1 Commerce examination.

Waec Model Questions Vol1 2021 Commerce Objective / Multiple Choice Hard Difficulty
Question 44 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • COMMERCE • objective

A retailer faces an annual demand of 12,000 units for a product. The ordering cost is ₦500 per order and the holding cost is 2 % of the unit purchase price per year. The supplier offers the following quantity discounts: - 1-199 units: unit price ₦80 - 200-499 units: unit price ₦75 - 500-999 units: unit price ₦70 - 1,000 units or more: unit price ₦65 Determine the order quantity that minimizes the total annual cost (ordering + holding + purchase) and state the corresponding total cost.

Answer Options

Correct Answer A. Order quantity = 3,039 units; Minimum total annual cost ≈ 783,951 Naira
B. Order quantity = 2,500 units; Minimum total annual cost ≈ 795,000 Naira
C. Order quantity = 1,000 units; Minimum total annual cost ≈ 820,000 Naira
D. Order quantity = 4,000 units; Minimum total annual cost ≈ 770,000 Naira
Correct Answer
A
Correct Option:
Order quantity = 3,039 units; Minimum total annual cost ≈ 783,951 Naira

About This Question

This is Waec Model Questions Vol1 2021 Commerce Question 44. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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