Question

The daily demand of an item is 1600 units. The average processing time is 30 seconds per unit. Containers (carrying 240 items) on the average wait for 5 hours before being processed. Currently 8 containers (kanbans) are being used for this parts. Assume a production schedule of one 8-hour shift per day. 1) What % safety margin of stock is being carried

Answer 1

Answer:

85 %

Explanation:

Given

The average processing time per unit =30 seconds

Working hour = 8 hrs

Number of items in a container = 240 items

Demand = 1600 units  

Time is taken for one container = 5 hrs.

Number of containers being processed = 8

Obtaining the Percentage safety margin of stock

The total items in the containers would be  = 240 x 8 =1920 items

No. of items in a container x No of container being processed

= 240 x 8 =1920 items

Since the average wait time would be 5 hrs before processing the first kanban time will account for the five hour wait.

Time taken for first kanban

= 5 hrs. + [(240 x 30)/3600] = 7 hrs.

Time used to process the remaining kanban would be

= (240 x 30) /3600 = 2 hrs

Since the shift is eight hours the time remaining  for the second kanban

= 8 hrs -7 hrs = 1 hr

This means that the number of  kanbans that would be processed daily per work shift is 1 since the second one cannot be completed.

Therefore the total items produced would be

= 240 x 1 =240  items

Margin of safety stock carried

$\frac{1600-240}{1600}$ x 100 = 85 %

Therefore the percentage safety margin of stock being carried is 85 %