2. If a business wants to reduce inventory by changing to a kanban system. How many containers are needed if daily demand is 1000 units, lead time is 2 days, safety stock is ¼ day, and container size is 475 units?
Expert Answer
Solution:
Given the data;
The daily demand is 1000 units
The production lead time is 2 days
1/4 day safety stock
One container fits 475 units
Putting in the following formula:
Kanban containers needed = [(production lead time x daily demand) + safety stock] / units per container
Production Lead time = 2 days
Daily Demand = 1000 units
Safety Stock = 1/4 day = (0.25
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