Weekly Usage of a Product Is 8 Units

question 29

Short Answer

Weekly usage of a product is 8 units. Since the plant operates 50 weeks per year, this leads to annual usage of 400 units. Setup cost is $40 and annualized carrying cost is $80. Weekly production of this product is 12 units. Lead time is four weeks, and safety stock is one week's production. What is optimal kanban size? What is the optimal number of kanbans?

---

Definitions:

No Haggle

A pricing strategy where the seller sets a fixed price for a product or service, eliminating the need for negotiation.

CarMax Dealership

A chain of used-car dealerships in the United States known for its no-haggle pricing and comprehensive vehicle inspection process.

Fixed-price Policy

A pricing strategy where a product or service is sold at a consistent price, regardless of market changes.

Buyers

Entities or groups that acquire products or services for personal consumption, to sell again, or for manufacturing needs.