Question

Calculate the inventory container size using the following information:

Demand rate = 10 parts per hour, Safety stock required = 15%, Number of containers = 14, Time to cycle through entire system = 6 hours

a. 2 parts
b. 3 parts
c. 4 parts
d. 5 parts

Answer 1

To calculate the container size, total demand including safety stock is divided by the number of containers, which results in 5 parts per container.

Step-by-step explanation:

The given problem requires us to calculate the inventory container size for a manufacturing system, using the provided demand rate, safety stock percentage, number of containers, and the time to cycle through the entire system. First, we calculate the total demand for the 6-hour cycle, which is 10 parts per hour times 6 hours, equaling 60 parts. Since we need safety stock of 15%, we apply this percentage to the total demand to get 60 parts * 0.15 = 9 additional parts for safety. Thus, the total parts needed, including safety stock, are 60 + 9 = 69 parts.

Now, with 14 containers to hold 69 parts, we divide the total parts by the number of containers to determine the number of parts per container. So, 69 parts divided by 14 containers equals approximately 4.93, which can be rounded up to 5 parts per container since we typically can't have a fraction of a part in a container.

The correct answer is d. 5 parts per container. This ensures that all parts will fit into the containers with the required safety stock.

Answer 2

The calculated inventory container size is 3 parts. Option B is answer.

Step-by-step explanation:

The inventory container size can be determined using the formula:

Container Size = (Demand Rate × Cycle Time) / ((1 - Safety Stock) × Number of Containers)

Given the values: Demand rate = 10 parts per hour, Cycle time = 6 hours, Safety stock = 15%, Number of containers = 14, substitute these into the formula:

Container Size = (10 parts/hour × 6 hours) / ((1 - 0.15) × 14)

Container Size = (60) / (0.85 × 14)

The resulting calculation is approximately 3 parts. Therefore, the calculated inventory container size is 3 parts.

Option B is the answer.