Question: ii) Isles Ltd require a kanban system for a specific part number AB-12345-AA which is going to be supplied by Gamma Ltd in containers, each

ii) Isles Ltd require a kanban system for a specific part number AB-12345-AA which is going to be supplied by Gamma Ltd in containers, each of quantity 3 . The weekly demand by day for this part number (in units) over the past six weeks has been as indicated in Table 6.1 and it has been agreed that the delivery frequency will be twice daily and the kanban signal will be via a 9 am and 1pm daily email. Table 6.1: Demand for Part-Number AB-12345-AA by week for six weeks The standard deviation of daily demand is equal to 6.2 units. The company allows 20% for safety stock and ideally it would like its buffer stock to accommodate a desired service level of 97.5%. (1) Calculate the maximum inventory level for AB-12345-AA at Isles Ltd (3 marks) (2) How many kanbans are needed? (2 marks) Note: Relevant Formulae are available in the Formula Sheet

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