A bottling plant fills 1,200 bottles every two hours. The lead time is 60 minute

Question

A bottling plant fills 1,200 bottles every two hours. The lead time is 60 minutes and a container accommodates 130 bottles. The safety stock is 20 percent of expected demand. How many kanban cards are needed? (Round up your answer to the next whole number.)

A bottling plant fills 1,200 bottles every two hours. The lead time is 60 minutes and a container accommodates 130 bottles. The safety stock is 20 percent of expected demand. How many kanban cards are needed? (Round up your answer to the next whole number.)

Explanation / Answer

k = DL(1 + S) / C

where,

k = Number of kanban card sets

D = Average number of units demanded per period
L = Lead time to replenish an order (expressed in the same units as demand)
S = Safety stock expressed as a percentage of demand during the lead time
C = Container size

Here,

D = If the average number of units demanded is 1200 and the time period is 2 hours, then that's the same as 600 in an hour, 600 in 60 minutes, 10 in one minute.

So, D = 10 bottles in 1 min

   L = 60 min

S = 0.2

   C = 130 bottles

Putting all these values in formula, we get

k = DL(1 + S) / C

= 10 * 60 ( 1 + 0.2) / 130

= 600 (1.2) / 130

= 5.53846

= 6 (Rounding up to the next whole number)

Therefore, 6 kanban cards are needed.

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