Operations Management
Operations Management
11th Edition
ISBN: 9780132921145
Author: Jay Heizer
Publisher: PEARSON
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Chapter 16, Problem 3P

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•• 16.3 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 = 2,500 (50 weeks × 5 days each × daily usage of 10 subassemblies)

Lead time = 16 days

Safety stock = 4 days’ production of subassemblies.

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