A regional manufacturer of table lamps plans on using a manual kanban information system. On average the firm produces 1,200 lamps monthly. Production leadtime is 18 days, and the firm plans to have 15 percent buffer stock. Assume 20 working days per month.b. What is the maximum WIP inventory the company can expect to have usingthis system?
A regional manufacturer of table lamps plans on using a manual kanban information system. On average the firm produces 1,200 lamps monthly. Production leadtime is 18 days, and the firm plans to have 15 percent buffer stock. Assume 20 working days per month.b. What is the maximum WIP inventory the company can expect to have usingthis system?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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A regional manufacturer of table lamps plans on using a manual kanban information system. On average the firm produces 1,200 lamps monthly. Production lead
time is 18 days, and the firm plans to have 15 percent buffer stock. Assume 20 working days per month.
b. What is the maximum WIP inventory the company can expect to have using
this system?
Expert Solution
Step 1
The maximum level of WIP can be calculated as follows:
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