Adistribution center (dc) in wisconsin stocks sony plasma tv sets. the center receives its inventory from a mega warehouse in kansas with a lead time (l) of 5 days. the dc uses a reorder point (r) of 300 sets and a fixed order quantity (q) of 250 sets. current on-hand inventory at the end of day 1 is 400 sets. there are no scheduled receipts (sr) and no backorders (bo). all demands and receipts occur at the end of the day.

determine when to order using a q system

The order can be placed when the quantity is 1,350 units

Explanation:

Lead time = 5days

Reorder point = 300 set

Fixed order quantity = 250 sets

Current on hand inventory = 400 sets

To determine when to order using a Q system, we use the formula

Reorder level = maximum usage × maximum Lead time + Fixed order quantity

= ( 300 × 5) + 250

= 1,500 + 250

= 1,750

To determine when to order we subtract Reorder level from the current on hand inventory

= 1,750 - 400

= 1,350units

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.