A Company Is Using a Kanban System with 2 Containers

question 26

Essay

A company is using a Kanban system with 2 containers, each holding 50 parts, between a downstream (using) and an upstream (producing) work center.The using work center can handle 250 jobs per day.The average elapsed time for the entire cycle is currently .25 days.The company is concerned with the safety factor for the operation and the size of the containers.
a.What is the efficiency rating of the current operation?
b.If the company decides to use only one container, how many parts must it hold?
c.If the safety factor is changed to .12 and there are still 2 containers, how many parts must each container now hold?

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Definitions:

Earned Income

Income derived from active participation in a trade or business, including wages, salaries, tips, and net earnings from self-employment.

Income Recognition

The accounting principle that income should be recognized in the accounting period in which it is earned.

Transaction

A financial operation between two parties involving an exchange or transfer of goods, services, or funds.

Social Security Income

Social Security Income (SSI) is a government program that provides financial assistance to individuals who are elderly, blind, or have disabilities, based on income needs.