If Freemantle Ferry Company has a safety stock of 240 units and the average daily demand is 30 units,how many days can be covered if the shipment from the supplier is delayed by 12 days?
A)12.0 days
B)6.7 days
C)8.0 days
D)10.0 days

Question

Quizplus · Accepted Answer

To calculate the number of days that the safety stock can cover, we need to divide the total amount of safety stock by the average daily demand:

240 units ÷ 30 units/day = 8 days

Therefore, Freemantle Ferry Company can cover 8 days with their safety stock. If the shipment from the supplier is delayed by 12 days, they will not have enough stock to cover the demand for the entire duration of the delay. Therefore, the company will need to consider ordering more stock or finding an alternative supplier to avoid a stock-out situation.

Option C, which states that the company can cover 8.0 days, is the correct answer.

If Freemantle Ferry Company Has a Safety Stock of 240