Case 6.1 the Edward James Toy Company Uses a Kanban System to System

question 4

Multiple Choice

Case 6.1
The Edward James Toy Company uses a Kanban system to make plastic wheels that are a component of several toys. The waiting time for a container of the wheels during production is 0.25 day; average processing time is 0.15 day per container. Each container holds 200 wheels. The company uses 2,000 wheels a day in the production of its products.
-Use the information in Case 6.1. Using a policy variable of 5%, calculate the number of Kanban containers needed for the wheels.

• A) three or fewer
• B) four or five
• C) five or six
• D) seven or more

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Definitions:

Contractual Loan Restrictions

Stipulations within a loan agreement that limit certain actions of the borrower to protect the interests of the lender.

Preferred Dividends

Preferred dividends are payments made to preferred shareholders before any dividends are paid to common shareholders, typically at a fixed rate.

Operating Expenses

Costs associated with the day-to-day functions of a business, excluding the cost of goods sold.

Cost of Goods Sold

An expense reported on the income statement that represents the total cost of products or services that have been sold.