Kanban Blue Wave Enterprises is a Canadian manufacturer of party products. A new
ID: 464541 • Letter: K
Question
Kanban Blue Wave Enterprises is a Canadian manufacturer of party products. A new line of birthday candles is selling successfully but not profitable. The production process is fairly but takes 4 days and candles have to retail at a very low price to be competitive. The owner of the company feels that the greatest cost is in keeping 50,000 packages of candles in inventory. She wants to implement a Kanban system to reduce storage costs. The operations manager provides the owner with the following information:
Daily demand 3,000 packages of candles
Lead time 4 days
Safety stock 1 day
Container size 250 packages How many Kanbans will be required and what does this mean?
Explanation / Answer
# packages Container Size 250 Daily Demand 3000 # days Lead Time 4 Safety Stock 1 No of Kanban Card required k = Demand + Safety Stock / Container Size k = DL(1+S) / C k = [3000 * (4+1)]/250 k = 60 Thus 60 kanban cards are requried. where, k = number of cards D = demand per unit of time L = lead time S = Safety Factor C = container capacity
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