Answered: Krupp Refrigeration, Inc., is trying to…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

Krupp Refrigeration, Inc., is trying to reduce inventory and wants you to install a kanban system for compressors on one of its
assembly lines. Determine the size of the kanban and the number of kanbans (containers) needed.
Setup cost = $10
Annual holding cost per compressor = $100
Daily production = 200 compressors
Annual usage = 25,000 (50 weeks * 5 days each * daily usage of 100 compressors)
Lead time = 3 days
Safety stock = 1

2 day’s production of compressors

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