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Chapter 16, Problem 6P
Summary Introduction

To determine: The number of kanbans needed.

Concept introduction

The Economic Order Quantity is the order quantity at which the overall cost is minimum, given the set up or ordering cost, the annual demand and the inventory holding cost.

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Pauline Found Manufacturing, Inc., is moving tokanbans to support its telephone switching-board assemblylines. Determine the size of the kanban for subassemblies and thenumber of kanbans needed.Setup cost = $30 Annual holding cost = $120 per subassemblyDaily production = 20 subassembliesAnnual usage = 2,500 (50 weeks * 5 days each* daily usage of 10 subassemblies)Lead time = 16 daysSafety stock = 4 days> production of subassemblies
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
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 40 subassemblies Annual usage 2,500 ​(50 weeks×5 days each×daily usage of 10 ​subassemblies) Lead time 16 days Safety stock 4 ​days' production Part 2 Kanban container size​ = enter your response here units ​(round your response to the nearest whole​ number).
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