C. Suppose the lead time is reduced to three hours. Will this make any difference in the inventory levels? Why? Show your work.

T = 3

Using the same formula as above, we get:

K = (300 x 3 x 1.1) / 40 = 24.75, which we will round up to 25.

Therefore, 25 kanban production cards are needed.

Each kanban card still represents one container with a capacity of 40 units, so the kanban system will still represent:

40 x 25 = 1,000 units, which can last for: 1,000 / 300 = 3.33 hours, which we will round down to 3 hours.

Therefore, the answer is 3 hours. The reduced lead time does not make a significant difference in the inventory levels.