Case 6.1
The Edward James Toy Company uses a Kanban system to make plastic wheels that are a component of several toys. The waiting time for a container of the wheels during production is 0.25 day; average processing time is 0.15 day per container. Each container holds 200 wheels. The company uses 2,000 wheels a day in the production of its products.
-Use the information in Case 6.1. How many Kanban containers would be required if a 10% policy variable is used?
A) three or fewer
B) four or five
C) five or six
D) seven or more

Question

Quizplus · Accepted Answer

To calculate the number of Kanban containers required, we need to use the formula:
Number of containers = (Daily demand x Waiting time) + Safety stock / Container size - Processing time
Daily demand = 2,000 wheels/day
Waiting time = 0.25 day/container
Processing time = 0.15 day/container
Container size = 200 wheels/container
Safety stock = 10% of daily demand = 200 wheels

Substituting values in the formula, we get:
Number of containers = (2000 x 0.25) + 200 / (200-0.15) 
Number of containers = 500 + 200 / 199.85
Number of containers = 2.5 (approx)

Since we cannot have partial containers, we need to round up the number of containers required to the nearest whole number, giving us 3 containers. However, a 10% policy variable is used, meaning we add a safety stock of 10% to the daily demand. This would require an additional container, making the total number of containers required to be 4 or 5.

Therefore, the best choices are B, four or five.

Case 6.1 the Edward James Toy Company Uses a Kanban System to System