Chapter 17, Problem 14PA

(a)

Summary Introduction

Interpretation:

Total number of Kanbans required

Concept Introduction:

In the Just-In-Time (JIT) system, the material is purchased and goods and services are generated in a sufficient amount. JIT is a part of the inventory and production management. It is very reliable in satisfying the actual demand of the customers and can reduce waste and error at the same time.

Explanation of Solution

The total number of the Kanbans can be calculated by the following formula.

  $\text{K=}\frac{\text{D}\left(\text{p+t}\right)\left(\text{1+γ}\right)}{\text{C}}$

Where,

  $\begin{array}{l}\text{Daily demand (D)=17units/day}\\ \text{Processing time+waiting time }\left(\text{p+t}\right)\text{= 3}\text{.75}\\ \text{Container Size }\left(\text{C}\right)\text{ = 4}\\ \text{Safety factor }\left(\text{γ}\right)\text{ = 5\% or 0}\text{.05}\end{array}$

Now, putting the values in the formula.

  $\begin{array}{l}\text{K=}\frac{\text{D}\left(\text{p+t}\right)\left(\text{1+γ}\right)}{\text{C}}\\ \text{K=}\frac{17\left(3.75\right)\left(\text{1+0}\text{.05}\right)}{4}\\ \text{K=}\frac{17\left(3.75\right)\left(1.05\right)}{4}\\ =\frac{66.93}{4}\\ =\text{ 16}\text{.73=17}\end{array}$

Hence, the total number of Kanbans required is 17.

(b)

Summary Introduction

Interpretation:

Maximum authorized router inventory

Concept Introduction:

In the Just-In-Time (JIT) system, the material is purchased and goods and services are generated in a sufficient amount. JIT is a part of the inventory and production management. It is very reliable in satisfying the actual demand of the customers and can reduce waste and error at the same time.

Explanation of Solution

The maximum authorized router inventory is calculated by the following formula.

  $\begin{array}{l}\text{Maximum authorized system= K}\times \text{C}\\ \text{= 17}\times \text{4}\\ \text{= 68}\end{array}$

Hence, the maximum authorized inventory is 68.

(c)

Summary Introduction

Interpretation:

The average inventory of routers

Concept Introduction:

In the Just-In-Time (JIT) system, the material is purchased and goods and services are generated in a sufficient amount. JIT is a part of the inventory and production management. It is very reliable in satisfying the actual demand of the customers and can reduce waste and error at the same time.

Explanation of Solution

The average inventory of the router is calculated by the following formula.

  $\begin{array}{l}\text{Average inventory of routers = }\frac{\text{K×C}}{\text{2}}\\ \text{= }\frac{17\times 4}{2}\\ \text{= 34}\end{array}$

Hence, the average inventory of routers is 34.

(d)

Summary Introduction

Interpretation:

On fluctuating the waiting time and total processing time then the new answer to part (a)

Concept Introduction:

In the Just-In-Time (JIT) system, the material is purchased and goods and services are generated in a sufficient amount. JIT is a part of the inventory and production management. It is very reliable in satisfying the actual demand of the customers and can reduce waste and error at the same time.

Explanation of Solution

A total number of the Kanbans can be calculated by the following formula.

  $\text{K=}\frac{\text{D}\left(\text{p+t}\right)\left(\text{1+γ}\right)}{\text{C}}$

Where,

  $\begin{array}{l}\text{Daily demand (D)=17units/day}\\ \text{Processing time+waiting time }\left(\text{p+t}\right)\text{= 2}\text{.75}\\ \text{Container Size }\left(\text{C}\right)\text{ = 4}\\ \text{Safety factor }\left(\text{γ}\right)\text{ = 5\% or 0}\text{.05}\end{array}$

Now, putting the values in the formula.

  $\begin{array}{l}\text{K=}\frac{\text{D}\left(\text{p+t}\right)\left(\text{1+γ}\right)}{\text{C}}\\ \text{K=}\frac{17\left(2.75\right)\left(\text{1+0}\text{.05}\right)}{4}\\ \text{K=}\frac{17\left(2.75\right)\left(1.05\right)}{4}\\ =\frac{49.08}{4}\\ =\text{ 12}\text{.27=13}\end{array}$

Now, the total number of Kanbas is 13.

  $\begin{array}{l}\text{Maximum authorized system= K}\times \text{C}\\ \text{= 13}\times \text{4}\\ \text{= 52}\end{array}$

  $\begin{array}{l}\text{Average inventory of routers = }\frac{\text{K×C}}{\text{2}}\\ \text{= }\frac{13\times 4}{2}\\ \text{= 26}\end{array}$