Waec Model Questions Vol1 2024 Commerce Question 28

Practice objective / multiple choice question 28 from the 2024 Waec Model Questions Vol1 Commerce examination.

Waec Model Questions Vol1 2024 Commerce Objective / Multiple Choice Hard Difficulty
Question 28 WAEC_MODEL_QUESTIONS_VOL1 • 2024 • COMMERCE • objective

A retailer faces an annual demand of 12,000 units for a product. The ordering cost is ₦15,000 per order. The unit cost is ₦200 and the holding cost is 25% of the unit cost per year. A shortage penalty of ₦500 per unit per year is incurred for any back‑ordered units. The warehouse can hold at most 800 units at any time. Determine the order quantity that minimises the total annual cost while respecting the space limit, and compute that minimum total cost.

Answer Options

A. Order quantity = 600 units; Minimum total annual cost = ₦240,000
Correct Answer B. Order quantity = 800 units; Minimum total annual cost = ₦245,000
C. Order quantity = 800 units; Minimum total annual cost = ₦250,000
D. Order quantity = 750 units; Minimum total annual cost = ₦245,500
Correct Answer
B
Correct Option:
Order quantity = 800 units; Minimum total annual cost = ₦245,000

About This Question

This is Waec Model Questions Vol1 2024 Commerce Question 28. It is one of the objective questions from the 2024 Waec Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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