Daily Usage of a Product Is 10 Units

question 60

Essay

Daily usage of a product is 10 units. Since the plant operates 250 days per year, this leads to annual usage of 2500 units. Setup cost is $60 and annualized carrying cost is $80. Daily production of this product is 14 units. Lead time is three days, and safety stock is one day's production. What is optimal kanban size? What is the optimal number of kanbans?

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Definitions:

Inductive Reasoning

A logical process in which multiple premises, all believed true or found true most of the time, are combined to obtain a specific conclusion.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, often leading to a quick but imprecise solution.

Ponzo Illusion

An optical illusion where parallel lines appear to converge, demonstrating how context influences perceptual size evaluation.

Social Contract Theory

A theory in political philosophy that posits the legitimacy of the authority of the state over the individual is grounded in a hypothetical contract between them.