Question

Armstrong Security produces a variety of commercial burglar alarms. Their least expensive model has a demand of 400 units per day, the current lead time for this model is 2 days. They use containers that hold 20 alarms and use 44 Kanbans. What is their current safety stock policy (in percentage)?

Answer 1

Answer:

10%

Explanation:

Demand (D) = 400 per day, Lead time (L) = 2 days, Container capacity (C) = 20, Kanban (K) = 44. Let X represent safety factor

K = D * LT * (1+X) / C

44 = 400 * 2 * (1+X) / 20

880 = 400 * 2 * (1+X)

1 + X = 880 / 800

1 + X = 1.1

X = 1.1 - 1

X = 0.1

X = 10%

So therefore, their current safety stock policy is 10%