Ferdows Electronics, Inc. (FEI), produces short runs of custom microwave radios

Question

Ferdows Electronics, Inc. (FEI), produces short runs of custom microwave radios for railroads and other industrial clients. You have been asked to reduce inventory by introducing a kanban system. After several hours of analysis, you develop the following data for connectors used in one work cell. How many kanbans do you need for this connector? Daily demand Production lead time Safety stock Kanban size 1,500 radios 1 day 1/2 day 250 radios kanbans are required (enter your response as a whole number)

Explanation / Answer

Number of Kanban = [ DD * LT * (1 + % SS) ] / Q

DD =Daily Demand

LT = Lead Time (in Days)

SS = Safety Stock

Q = Quantity in a Container

Daily Demand (DD) = 1500

Lead time (LT) = 1 day

Safety Stock percentage = 50%

Quantity in a container = 250

Number of Kanbans = [1500*1*(1+50%)]/250 = (1500*1*1.5)/250 = 9

Ans: 9 Kanbans are required

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