Question

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)

Answer 1

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