Final answer:
Davis Company uses the risk control technique called 'separation' by distributing finished goods between two warehouses to limit losses in case of a fire.
Step-by-step explanation:
The simple risk control technique used by Davis Company to limit losses in the event of a warehouse fire is called separation. Rather than storing all finished goods in a single location, the company divides them between two warehouses. This separation strategy helps to minimize the impact of a fire by ensuring that not all goods are stored in one place.
When a company, like Davis Company, distributes its finished goods between two warehouses instead of storing them all in a single location, it is practicing a risk control technique known as separation. This method is designed to minimize the potential losses that could occur in case one of the warehouses is affected by a disaster, such as a fire. Answering the student's question, the technique used by Davis Company is defined as 'separation', which reduces risk by distributing assets across multiple locations to avoid a total loss.