Exhibit 20-4 the Hanover Catalog Company Has the Following Information

question 69

Multiple Choice

Exhibit 20-4 The Hanover Catalog Company has the following information available concerning one of its inventory items:
Refer to Exhibit 20-4. If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

• A) 0.5 days
• B) 2 days
• C) 133 days
• D) 263 days

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Definitions:

Induced Consumption

Consumer spending that varies with income, representing the portion of income that households spend on goods and services rather than saving.

Disposable Income

Income available to households for the strategies of saving and spending after tax deductions.

Billion

A Billion is a numerical value equivalent to one thousand million (1,000,000,000) in the American short scale, commonly used in financial and demographic contexts.

Saving

The portion of income that is not spent on consumption or taxes, often set aside for future use or investment.