Maggie moylan motorcycle corp. uses kanbans to supportits

Maggie Moylan Motorcycle Corp. uses kanbans to supportits transmission assembly line. Determine the size of the kanbanfor the mainshaft assembly and the number of kanbans needed.

 

Setup cost (S) =$20

Annual holding cost of mainshaft assembly (H)= $250 per units

Daily production(p) =300 mainshafts

Annual usage(D) = 20,000 (=50 weeks x 5 days each x daily usage of 80 mainshafts)

Lead time=3 days

Safety stock=1/2 day’s production of mainshafts

Daily Usage (d) = 80

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