Maggie Moylan Motorcycle Corp. uses kanbans to support its transmission assembly
ID: 377637 • Letter: M
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
$220
Daily production
300
Annual usage
25,000
weekstimes×5
eachtimes×daily
100
Lead time
3
Safety stock
0.50
Kanban container size = ____mainshafts (round your response to the nearest whole number).
what is number of kanbans needed?
Setup cost
$20
Annual holding cost
$220
per mainshaftDaily production
300
mainshafts/dayAnnual usage
25,000
(50weekstimes×5
dayseachtimes×daily
usage of100
mainshafts)Lead time
3
daysSafety stock
0.50
days' productionExplanation / Answer
Given Values
Setup cost (S) = $20
Annual holding cost (H) = $220per mainshaft
Daily production (p) = 300 mainshafts/day
Daily usage (d) = 100 mainshafts
Annual usage (D) = 25,000
Lead time = 3 days
Safety stock = 0.50 days’ production (100/2) = 50
EOQ= square root of {[2DS/h (1-d/p)]}
=square root of {[2*25000*20/220(1-100/300)]}
=square root of {[1000000/220*0.66]}
=square root of {1000000/145.2}
=square root of {6887.05}
= 82.98
So the size of the Kanban is 83.
Now number of Kanbans needed is,
= (Demand during lead time + Safety stock)/ Size of the Kanban
= (3*100+50)/83
= 300+50/83
= 350/83
= 4.23
So we needed 5 KANBAN as KANBAN in decimal means we should go upper side to make it whole number therefore 4.23 will become 5
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