Question

Pauline Found​ Manufacturing, Inc., is moving to kanbans to support its telephone​ switching-board assembly lines. Determine the size of the kanban for subassemblies and the number of kanbans needed. Setup cost ​$30 Annual holding cost ​$100 per subassembly Daily production 25 subassemblies Annual usage 4 comma 500 ​(50 weekstimes5 days eachtimesdaily usage of 18 ​subassemblies) Lead time 16 days Safety stock 2 ​days' production Kanban container size​ = 98 units ​(round your response to the nearest whole​ number). Number of kanbans needed​ = 3 kanbans ​(round your response to the nearest whole​ number).

Answer 1

Answer:

Container size = 52

Number of kanbans required ≈ 7 kanbans

Explanation:

Given the data in the question, to find the Kanban container size, we calculate the economic order quantity (EOQ) using the formula below :

$EOQ = \sqrt{(2*annual usage A*setup cost S)/annual holding cost H}$

Where

Annual usage A = 4500

Setup cost S = $30

Annual holding cost H = $100

Container size = √{(2×4500×30)÷100}  = √2700 = 51.96 ≈ 52

Container size = 52

Number of Kanbans required = (demand during lead time + safety stock) / container size

Where:

Demand during lead time = lead time (16) * daily usage (18)

Demand during lead time = 16*18 = 288

Safety stock = 2 days production, where daily production is 25 subassemblies.

Safety stock = 2*25 = 50 units

Container size = 52 units

Imputing the data into the equation, we obtain :

Number of kanbans required = (288 + 50)/52 = 338/50 = 6.5

Number of kanbans required ≈ 7 kanbans