Use the following information to answer questions 1-3. Suppose a “lean” work center is being operated with a container size of 25 units and a demand rate of 100 units per hour. Also assume it takes 2 hours lead time for the upstream work center to fulfill a downstream container request. Also assume the firm operates 20 days in the coming month.
1. Assuming a safety stock factor of 5 percent, how many containers are required?
2. In theory, what is the maximum inventory (number of units) that could accumulate?
3. In theory, what is the minimum inventory (number of units) that could accumulate?
4. Suppose a “lean” work center is being operated with a container size of 25 units and a demand rate of 100 units per hour. Also assume it takes 180 minutes lead time for the upstream work center to fulfill a downstream container request. Assuming a safety stock factor of 10 percent, how many containers are required?