Question

Pauline Found Manufacturing, Inc., is moving to kanbans to support its telephone switching-board assembly lines. Determine...

Pauline Found 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

$120 per subassembly

Daily production

20 subassemblies

Annual usage

25000 (50 weeks* 5 days each *daily usage of 10 Subassemblies)

Lead time

16 days

Safety stock

4 days

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