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 ​$120 per subassembly
  Daily production 20 subassemblies
  Annual usage 4,000 ​(50 weeks x 5 days each x daily usage of 16 ​subassemblies)
Lead time 12 days
Safety stock 3 ​days' production

Kanban container size​ = units ​(round your response to the nearest whole​ number).

Number of kanbans needed: kanbans (round your response to the nearest whole​ number).

Answer 1

From the question, Given that

Setup cost (S) = ​$30

Annual holding cost (H)= ​$120 per subassembly

  Daily production (p) = 20 subassemblies

Annual usage (D)= 4,000 ​(50 weeks x 5 days each x daily usage of 16 ​subassemblies)

Lead time = 12 days
Safety stock = 3 ​days' production

daily usage (d) = 16 ​subassemblies

First, we determine the kanban container size. To do this, determine the production order quantity which determine the Kanban size

Size of the Kanban container is 100

We determine the number of Kanban is

Demand during lead time is = 12*16 = 192

Safety Stock = 20*3 = 60

Number of Kanban = (Demand during lead time + Safety Stock) / size of container

= (192+60)/100 =2.52 = 3