Maggie Moylan Motorcycle Corp. uses kanbans to supportits transmission assembly line. Determine the size of the kanbanfor the mainshaft assembly and the number of kanbans needed.
Setup cost (S) =$20
Annual holding cost of mainshaft assembly (H)= $250 per units
Daily production(p) =300 mainshafts
Annual usage(D) = 20,000 (=50 weeks x 5 days each x daily usage of 80 mainshafts)
Lead time=3 days
Safety stock=1/2 day’s production of mainshafts
Daily Usage (d) = 80