Maggie moylan motorcycle corp. uses kanbans to supportits

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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