Imagine Comparing a Manufacturing Operation Using Regular Lot-Sizing and the Same

question 64

Multiple Choice

Imagine comparing a manufacturing operation using regular lot-sizing and the same operation with a kanban/lean production approach. What would be your expectations of the difference between the total cost (i.e., inventory holding costs + setup/ordering costs) of each?

• A) Inventory holding cost will increase nonlinearly with inventory.
• B) Total costs will be lower for the regular lot-size operation.
• C) Total costs will be lower for the kanban/lean production operation.
• D) The order quantity will be larger for the kanban/lean production approach.
• E) As long as the total quantity is the same, total costs will be the same.

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Definitions:

Process Variability

The natural or inherent variations in a process, reflecting the differences in output or results when the process is repeated under the same conditions.

S Chart

A type of control chart used for monitoring the variability of a process over time, particularly when sample sizes are constant.

Process Capability Index

A statistical measure that quantifies how well a process can produce output within specification limits compared to its natural variability.

Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of values.