Consider a work center with a demand rate of 20 parts per hour and using a container that can hold 5 parts. It is estimated that the container takes 30 minutes to cycle through the work cell. Assume a safety stock level of 10 percent. What is the value of D for this system?
A) 5
B) 0.5
C) 0.1
D) 20

Question

Quizplus · Accepted Answer

The demand rate given in the problem is 20 parts per hour. To find out the demand during the cycle time of the container (30 minutes or 0.5 hours), we need to multiply the demand rate by the cycle time:
Demand during one cycle = 20 parts/hour * 0.5 hour/cycle = 10 parts/cycle
Since the container can hold 5 parts, the container has to be replenished every two cycles, and the demand during the lead time (the time it takes to replenish the container) is 20 parts. The safety stock level is 10% of the demand rate or 2 parts. Therefore, the total demand during the lead time is 20 + 2 = 22 parts. Thus, the value of D for this system is 22 parts.

Consider a Work Center with a Demand Rate of 20