Maggie Moylan Motorcycle Corp. uses kanbans to support its transmission assembly line. Determine the size of the kanban for the mainshaft assembly and the number of kanbans needed.
Setup cost $20
Annual holding cost $400 per mainshaft
Daily production 320 mainshafts/day
Annual usage 20,000 (50 weekstimes5 days eachtimesdaily usage of 80 mainshafts)
Lead time 5 days
Safety stock 1.00 days' production
Kanban container size = _ mainshafts (round your response to the nearest whole number).
Number of kanbans = _ kanbans (round your response to the nearest whole number)

Question

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andromache andromache · Answer 1 · 2020-05-17T07:23:41+02:00

Answer:

Kanban container size = 52 units

Number of kanbans needed = 8

Explanation:

As per the data given in the question,

Calculation for Economic Production Quantity :

Q^2 = 2 × Annual demand × Setup cost ÷ (Annual holding cost ×(1 - (daily demand ÷ daily production)))

Q^2 = 2 × 20,000 × 20 ÷ ($400 × (1 - (80 ÷ 320)))

Q^2 = 800,000 ÷ 300

Q = Kanban container size = 52 units

Number of kanbans needed = ( Demand during lead time+safety stock ) ÷ container size

= ((5 × 80) + 50) ÷ 52

= 8.65

= 8 kanbas