A company using a Kanban system has an inefficient machine group. For example, the daily demand for part L105A is 3,000 units. The average waiting time for a container of parts is 0.8 day. The processing time for a container of L105A is 0.2 day, and a container holds 270 units. Currently, 20 containers are used for this item.
a. What is the value of the policy variable, a?
b. What is the total planned inventory (work-in-process and finished goods) for item L105A?
c. Suppose that the policy variable, a, was 0. How many containers would be needed now? What is the effect of the policy variable in this example?