March Manufacturing uses an average of 150 components per day, although usage can run as high as 175 components per day. If lead time is three days, how much safety stock should March have on hand?
A)75 components
B)450 components
C)510 components
D)150 components

Question

Quizplus · Accepted Answer

Safety stock is calculated as (Maximum usage - Average usage) x Lead time. Here, it's (175 - 150) x 3 = 25 x 3 = 75 components.

March Manufacturing Uses an Average of 150 Components Per Day