Maggie moylan motorcycle corp. uses kanbans to support its

/in /by

Maggie Moylan Motorcycle Corp. uses kanbans to support
its transmission assembly line. Determine the size of the kanban
for the mainshaft assembly and the number of kanbans needed.

Setup cost =$20
Annual holding cost of mainshaft assembly = $250 per units
Daily production=300 mainshafts
Annual usage= 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