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Kanban usage of products

Weekly Usage of a product is 8 units. The plant operates 50 weeks per year, this lead to an annual usage of 400 units. The setup cost is $40 and annualized carrying cost is $80. Weekly production of this product is 12 units. Lead time is 4 weeks and Safety Stock is 1 week's production.

What is the optimal Kanban size?
What is the optimal number of Kanbans?

Solution Summary

The optimal size and numbers of Kanban produced each week is determined.