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

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Answer #1

SETUP COST (D) = 30

ANNUAL HOLDING COST = 120

DAILY PRODUCTION = 30

ANNUAL DEMAND = 4000

DAILY USAGE = 16

LEAD TIME = 10

SAFETY STOCK = 2 * DAILY PRODUCTION

CONTAINER SIZE = SQRT((2 * ANNUAL DEMAND * SETUP COST) / (HOLDING COST * (1 - (DAILY USAGE / DAILY PRODUCITON))))

Q*P = SQRT((2 * 4000 * 30) / (120 * (1 - (16 / 30)))

Q*P = 65

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