Determine the size of the kanban for subassemblies


Problem: Chris Millikan 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 subassembly    =    $120 per subassembly
Daily production                            =    30 subassemblies
Annual usage                                =    2,500 (50 weeks × 5 days each × daily usage of 10 subassemblies)
Lead time                                     =    6 days
Safety stock                                 =    4 days’ production of subassemblies.

Size of kanbans: ____________

Number of kanbans: ____________

Round your answers up to the nearest whole number; for example, round 11.2 to 12 .

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