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Hi, can someone help me with this question? the solution key says the answer is...

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Accounting

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Hi, can someone help me with this question? the solution key says the answer is a) 1200 but where did that 1200 come from? I thought 120 would be one of the choices yet it shows 1200....? where does that number come from?

please show your work! and thanks in advance

Liberty Celebrations, Inc. manufactures a line of flags. The annual demand for its flag display is estimated to be 100,000 units. The annual cost of carrying one unit in inventory is $1.60, and the cost to initiate a production run is $50. There are no flag displays on hand but Liberty had scheduled 60 equal production runs of the display sets for the coming year, the first of which is to be run immediately. Liberty Celebrations has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. [CMA Adapted] A safety stock of a 3-day supply of flag displays would increase Liberty Celebration's planned average inventory in units by 1,200. 800. 400. zero. 6. 100,000/250 days = 40 demand per day 40 x 3 days = 120

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