Chelsea Company has determined the following costs are associated with one of its products.$\begin{array}{ll}
\text { Lead time (weeks) } & 12 \
\text { Average weekly usage (units) } & 120 \
\text { Maximum weekly us age (units) } & 140
\end{array}$
-
The safety stock is

A)240 units.
B)206 units.
C)300 units.
D)150 units.

Question

Chelsea Company has determined the following costs are associated with one of its products.$\begin{array}{ll}
\text { Lead time (weeks) } & 12 \
\text { Average weekly usage (units) } & 120 \
\text { Maximum weekly us age (units) } & 140
\end{array}$
-
The safety stock is

A)240 units.
B)206 units.
C)300 units.
D)150 units.

Quizplus · Accepted Answer

The safety stock is calculated as (Maximum weekly usage - Average weekly usage) x Lead time. Here, it is (140 - 120) x 12 = 240 units.

Chelsea Company Has Determined the Following Costs Are Associated with One