Practical Operations Management
Practical Operations Management
2nd Edition
ISBN: 9781939297136
Author: Simpson
Publisher: HERCHER PUBLISHING,INCORPORATED
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Chapter 12, Problem 15P
Summary Introduction

Interpretation: Number of Kanban cards needs to be determined based on given information.

Concept Introduction: Kanban is an inventory scheduling process that helps managers to stock only needed subparts or components that are being used in the production process. However, once the operator will issue a card which is called a Kanban card to get another stock of components.

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Krupp Refrigeration, Inc., is trying to reduce inventory and wants you to install a kanban system for compressors on one of itsassembly lines. Determine the size of the kanban and the number of kanbans (containers) needed.Setup cost = $10Annual holding cost per compressor = $100Daily production = 200 compressorsAnnual usage = 25,000 (50 weeks * 5 days each * daily usage of 100 compressors)Lead time = 3 daysSafety stock = 1 2 day’s production of compressors
The following information describes a manufacturing system: Daily demand is 1,025 units. Replenishment lead time is 1.5 days. A 2.5 day safety stock is desired. Products are stored in containers that hold 940 units. How many kanban containers are needed for this system?
Suppose a lean work center is being operated with a container size of 25 units and a demand rate of 100 units per hour. Also assume it takes 180 minutes for a container to circulate.a. How many containers are required to operate this system?b. What is the maximum inventory that can accumulate?c. How many kanban cards are needed?
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