64 The Ham Bone Sandwich Company makes rib-shaped barbecue pork sandwiches that are frozen, boxed and shipped to large retailers. You have been asked to reduce inventory by establishing a kanban system. The daily production (demand) rate is 380 boxes. The production lead time is 3 days. They want to keep 1.5 days of safety stock on hand in finished goods (the safety stock factor) in order to respond quickly to spikes in demand. The kanban size is 80 boxes (which is roughly one pallet's worth of sandwiches).How many kanbans do they require? (Display your answer to the most appropriate whole number.)
Question
64 The Ham Bone Sandwich Company makes rib-shaped barbecue pork sandwiches that are frozen, boxed and shipped to large retailers. You have been asked to reduce inventory by establishing a kanban system. The daily production (demand) rate is 380 boxes. The production lead time is 3 days. They want to keep 1.5 days of safety stock on hand in finished goods (the safety stock factor) in order to respond quickly to spikes in demand. The kanban size is 80 boxes (which is roughly one pallet's worth of sandwiches).How many kanbans do they require? (Display your answer to the most appropriate whole number.)
Solution
To calculate the number of kanbans required, we first need to calculate the total demand during lead time and add the safety stock.
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Calculate the total demand during lead time: Daily demand (380 boxes) * Lead time (3 days) = 1140 boxes
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Calculate the safety stock: Daily demand (380 boxes) * Safety stock factor (1.5 days) = 570 boxes
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Add the total demand during lead time and the safety stock to get the total inventory needed: Total demand during lead time (1140 boxes) + Safety stock (570 boxes) = 1710 boxes
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Divide the total inventory needed by the kanban size to get the number of kanbans required: Total inventory needed (1710 boxes) / Kanban size (80 boxes) = 21.375
Since we can't have a fraction of a kanban, we round up to the nearest whole number.
So, they require 22 kanbans.
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