Berlin Industries uses a kanban system to manage production of the R-15 subassembly. They have an hourly demand for 250 units and use containers that can hold 50 parts each. It takes 90 minutes to fill and move a container of parts to the right place on the R-15 line that is currently rated at a 20% safety factor.
-Calculate the maximum system inventory for this part.
A)450 units
B)400 units
C)2,500 units
D)5,000 units
E)75 units

Question

Quizplus · Accepted Answer

The maximum system inventory is calculated using the formula: (Demand rate x Lead time) x (1 + Safety factor). Here, the demand rate is 250 units/hour, lead time is 1.5 hours (90 minutes), and the safety factor is 20% (0.2). So, (250 x 1.5) x (1 + 0.2) = 450 units.

Berlin Industries Uses a Kanban System to Manage Production of the R-15