Consider a work center with a demand rate of 15 parts per hour and using a container that can hold 15 parts. It is estimated that the container takes 90 minutes to cycle through the work cell. Assume a safety stock level of 20 percent. What is the maximum inventory for this system?
A) 10
B) 20
C) 30
D) 40

Question

Quizplus · Accepted Answer

First, we need to calculate the cycle time of the container: 
Cycle time = (60 minutes/hour) / (15 parts/hour) = 4 minutes/part
Therefore, the container takes 4 minutes/part x 15 parts = 60 minutes to be filled.
The lead time for the container to go through the work center is 60 + 90 = 150 minutes.
Next, we need to calculate the safety stock level: 
Safety Stock = Demand Rate x Lead Time x Safety Stock Percentage
= 15 parts/hour x 150 minutes x 20% = 45 parts
Finally, we can calculate the maximum inventory: 
Maximum Inventory = Container Capacity + Safety Stock
= 15 parts + 45 parts = 60 parts
Therefore, the answer is C) 30.

Consider a Work Center with a Demand Rate of 15