Albuquerque Company Has the Following Information Available Concerning One of Its

question 96

Multiple Choice

Albuquerque Company has the following information available concerning one of its inventory items: $$\begin{array} { l r } \text { Cost of placing an or der } & \$ 50.00 \\\text { Unit carrying cost per year } & \$ 2.00 \\\text { Annual unit demand } & 3,200 \\\text { Safety stock } & 80 \\\text { Average daily demand } & 10 \\\text { Normal lead time in days } & 12\end{array}$$ If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

• A)0.83 days
• B)8.00 days
• C)6.67 days
• D)40.00 days

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Definitions:

Capital Stock

The total amount of shares a company is authorized to issue, representing the equity stake of its owners.

Revised Act

An updated or amended version of a legislative act or statute that incorporates changes or new provisions to address issues or developments since its original enactment.

Articles of Incorporation

A document filed with a governmental body to legally establish a corporation, outlining basic details like name, purpose, and structure.

Conditions Precedent

Specific conditions outlined in a contract that must be fulfilled before a party's obligation or promise becomes enforceable.