Waec Model Questions Vol1 2022 Commerce Question 47

Practice objective / multiple choice question 47 from the 2022 Waec Model Questions Vol1 Commerce examination.

Waec Model Questions Vol1 2022 Commerce Objective / Multiple Choice Hard Difficulty
Question 47 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • COMMERCE • objective

A warehouse stocks a product that has an annual demand of 12,000 units. The ordering cost per order is ₦5,000 and the unit cost is ₦800. Holding cost is 20 % of the unit cost per year. The lead time is 10 days. Daily demand varies with a standard deviation of 30 units. To maintain a 95 % service level, the warehouse manager wants to (i) determine the Economic Order Quantity (EOQ), (ii) compute the reorder point (including safety stock), and (iii) calculate the total annual inventory cost (ordering + holding + purchase). Provide the three results rounded to the nearest whole number.

Answer Options

A. EOQ = 850 units; Reorder point = 470 units; Total annual cost = ₦9,650,000
B. EOQ = 800 units; Reorder point = 460 units; Total annual cost = ₦9,500,000
Correct Answer C. EOQ = 866 units; Reorder point = 485 units; Total annual cost = ₦9,738,580
D. EOQ = 900 units; Reorder point = 500 units; Total annual cost = ₦9,800,000
Correct Answer
C
Correct Option:
EOQ = 866 units; Reorder point = 485 units; Total annual cost = ₦9,738,580

About This Question

This is Waec Model Questions Vol1 2022 Commerce Question 47. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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