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 ​$125 per subassembly Daily production 25 subassemblies Annual usage 4 comma 000 ​(50 weeks times 5 days each timesdaily usage of 16 ​subassemblies) Lead time 10 days Safety stock 2 ​days' production Kanban container size​ = nothing units ​(round your response to the nearest whole​ number).

Answer 1

Kanban container size = 73

Number of kanbans needed = 5

Step-by-step explanation:

Kanban container size (Q):

Q = SQRT [(2 x D x S) / H x (1 - d/p)]

where,

D = Annual demand

S = Setup cost

H = Holding cost

d = Daily usage

p = Daily production

Putting the given values in the above formula,

CONTAINER SIZE = SQRT ((2 * ANNUAL DEMAND * SETUP COST) / (HOLDING COST * (1 - (DAILY USAGE / DAILY PRODUCTION))))

Q = SQRT [(2 x 4,000 x $30) / $125 x (1 - 16/25)]

Kanbans container size = 73 units (Rounding off to the nearest whole number)

NUMBER OF KANBANS = DEMAND DURING LEAD TIME + SAFETY STOCK / SIZE OF CONTAINER

K = ((16 * 16) + (4 * 25) / 73 = 5