Question

The Edward James Toy Company uses a Kanban system to make plastic wheels that are a component of several toys. The waiting time for a container of the wheels during production is 0.25 day; average processing time is 0.15 day per container. Each container holds 200 wheels. The company uses 2,000 wheels a day in the production of its products. Use the information in Case 6.1. How many Kanban containers would be required if a 10% policy variable is used

Answer 1

5 containers

Step-by-step explanation:

As we know that:

N = D*T*(1 + X) / C

Here

N is number of kanban containers required

D is the planned usage rate of employee work which is 2000 wheels a day

T is the summation of lead time and average production time (Days)

which means

T = Waiting time + Average Production Time = 0.25 + 0.15 = 0.4 days per container

X is the policy variable which is 10% here

C is capacity of container which is 200 wheels

By putting the above values, we have:

N = 2000 *0.4 *(1 + 10%) / 200

= 4.4 containers are required which means 5 containers because rounding down will result in loss of contribution hence we must round upward.