Determining size of kanban for subassemblies


Assignment:

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 = S120 pa subassembly
Daily production = 20 subassemblies
Annual usage = 3.500 (50 weeks X 5 days each
x daily usage of 10 subassemblies) Lead time = 16 days
Safety stock = 4 days' production of subassemblies

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Supply Chain Management: Determining size of kanban for subassemblies
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