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 0.25 days. The company is concerned about the safety factor for the operation.

a. What is the safety factor (α) of the current operation?

b. What is the efficiency rating of the current operation?

c. If the company decides to use only one container, how many parts must it hold?

d. If the safety factor is changed to 0.12 and there are still 2 containers, how many parts must each container now hold?

(a). 0.6

(b). 60%

(c). 100.

(d). 35.

Explanation:

(a). The safety factor (α) of the current operation can be calculated by using the formula below;

V = j (h + l) (1 + b) / w.

Where V = number of Kanban cards = 2, j = the using work center can handle daily = 250, l = The average elapsed time for the entire cycle = 0.25, h = processing time, b = policy variable and w = capacity.

Then, 250 * 0.25 * (1 + b) / (50) = 2.

b = 0.6.

(b). The efficiency rating of the current operation is;

250 (0.25) (1 + b) / 50 = 2

=> 1.25 (1 + b) = 2

1+b = 2/1.25 = 1.6.

b = 1.6 - 1 = 0.6.

= 60%.

(c). If the company decides to use only one container, it must hold;

250 (0.25) (1.6) / b = 1.

b = 250 (0.25) (1.6).

= 100 parts.

(d). 250 (0.25) (1.12) / b = 2.

2b = 250 (0.25) (1.12) = 70.

b = 70/2 = 35 parts.