John Deere Manufacturing plant in Quad City is moving to kanbansystem for its smaller size Backhoe production to improveefficiency. Production manager has collected the necessary data(shown below) to move to the kanban system. Determine the size ofthe kanban for Backhoe production and the number of kanbansneeded.
Setup cost
$35
Annual holding cost
$120 per unit
Daily production
30 units
Annual usage
4,000 units (50
weeks×5
days
each×daily
usage of
16
units)
Lead time
16
days
Safety stock
3
days’ production
a.) Kanban (container) size = ? units (round your response tothe nearest whole number).
b.) Number of kanbans needed = ? kanbans (round your responseto the nearest whole number).
Expert Answer
