“That’s not the formula I use” was the start of the debate. So looking at a few reference books and searching the web here’s what I’ve come up with. How can something so simple have so many variations? Let us count the ways …

1. No. of kanban = (DD*LT+SS*SQRT(LT/TB))/KB+(DD*EPEI)/KB

- Where: DD = Daily demand (units)
- LT = Replenishment leadtime (days)
- SS = Statistically calculated safety stock (units)
- SQRT = Square root
- TB = Time bucket of the safety stock data points (days)
- KB = Quantity per kanban (units)
- EPEI = Supplier’s replenishment interval (days)

2. #KB = (DD*(LT+SS))/KBS +1

- #KB = Number of Kanbans
- DD = Daily Demand
- LT = Lead Time
- SS = Safety Stock
- KBS = Kanban Size

3. Total Req’d Inventory = (Average period demand * Replenishment time) + 1 or 2 sigma + safety stock

4. Total Req’d Inventory = (Average period demand * Replenishment time) * 1.X {where X= 20-40%} and the # of bins = TRI / container or bin size

5. # Kanban = ((AD * RT) + (SF * SD))/SCQ

- AD = average period demand
- RT = replenishment time (in the same time bucket as AD)
- SF = the Z factor, typically 1.645 for 95%
- SD = demand standard deviation
- SCQ = the standard container quantity

6. # Kanban = (average demand during lead time + safety stock) / container quantity

7. N = (dL + S)/C

- N = number of kanban
- d = average demand per hour
- L = lead time in hrs
- S = safety
- C = container quantity

8. K=((RT * AC)/Cont) * (SF + C)

- K = number of kanban
- Cont = contents per kanban
- RT = replenishment lead time per kanban
- AC = average consumption per time period
- SF = safety factor
- C = constant, default = 1

The one I use is #5. Larry Loucka

More calculations here, and here.

Pingback: Lean Sigma Supply Chain » More Kanban Calculation