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

Setup Cost = $20

Annual holding cost of main shaft assembly = $250 per unit

Daily production = 300 main shafts

Annual usage = 20,000 (=50 weeks x 5 days each x daily usage of 80 main shafts)

Lead time = 3 days

Safety stock = 1/2 day's production of main shafts