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.
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Setup cost
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$30
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Annual holding cost subassembly
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$120 per subassembly
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Daily production
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30 subassemblies
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Annual usage
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2,500 (50 weeks × 5 days each × daily usage of 10 subassemblies)
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Lead time
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6 days
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Safety stock
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4 days' production of subassemblies.
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Size of kanbans: ____________
Number of kanbans: ____________
Round your answers up to the nearest whole number; for example, round 11.2 to 12 .