A producer of refrigerator compressors wants to implement a just-in-time production line to support demand from a neighboring appliance manufacturer. Demand from the appliance manufacturer is for 235 compressors a day. The production lead time is 6 days and the producer wants to have a 15% safety stock factor. This producer has also cut setup costs such that the optimal production quantity is 33 units.How many kanbans does this producer of compressors require? (Display your answer to the most appropriate whole number.)
Question
A producer of refrigerator compressors wants to implement a just-in-time production line to support demand from a neighboring appliance manufacturer. Demand from the appliance manufacturer is for 235 compressors a day. The production lead time is 6 days and the producer wants to have a 15% safety stock factor. This producer has also cut setup costs such that the optimal production quantity is 33 units.How many kanbans does this producer of compressors require? (Display your answer to the most appropriate whole number.)
Solution
To determine the number of kanbans required, we can use the following formula:
where:
- is the daily demand,
- is the lead time in days,
- is the safety stock factor,
- is the optimal production quantity.
Given:
- compressors/day,
- days,
- (15% safety stock),
- units.
Now, substitute the given values into the formula:
First, calculate the numerator:
Next, include the safety stock factor:
Now, divide by the optimal production quantity:
Since the number of kanbans must be a whole number, we round to the nearest whole number:
Therefore, the producer of compressors requires 49 kanbans.
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