Burley Company has the following information available concerning one of its inventory items:
-If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?
A) 40.00 days
B) 0.83 days
C) 8.00 days
D) 6.67 days

Question

Burley Company has the following information available concerning one of its inventory items:  
-If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?
A) 40.00 days 
B) 0.83 days 
C) 8.00 days 
D) 6.67 days

Quizplus · Accepted Answer

The safety stock for this item is 1,000 units. The average daily usage for this item is 125 units, which means that the safety stock will last for 8 days. This means that if there is a delay in shipping, Burley Company can cover approximately 8 days with the safety stock before running out of inventory. Therefore, the correct answer is C.

Burley Company Has the Following Information Available Concerning One of Its