Question

You have the following information: 5. Demand rate = 250 units per hour Lead time = 15 hours Container capacity 300 units Safety stock = 20% Determine the number of Kanban cards required. a. Convert these Kanban cards into the number of hours b. of demand they represent If the container size is reduced from 300 to 150 units C what impact, if any, will it have on inventory levels?

Please solve in excel with all formulas shown

Answer 1

Number of Kanban = DT(1+x)/C • D: Demand per unit of time • T: Lead time • C: Container capacity • X: Buffer, or safety factor

a)

Number of Kanban = 250*15*(1+20%)/300 = 15

b)

Number of hours = Number of Kanban*Container capacity/Demand rate = 15*300/250 = 18 hours

c) If container capacity is decreased from 300 to 150, number of Kanban required will increase basis equation. Also, the inventory level will decrease due to decrease in capacity.