Automobile transmission manufacturer is considering using a JIT approach to replenishing its stock of transmissions. Daily demand for transmission #230 is 25 transmissions per day and they are built in groups of six transmissions. Total assembly and waiting time is three days. The supervisor wants to use an alpha value (α) of 1, or 100 percent.
a. How many Kanbans are required?
b. What is the maximum authorized inventory?
c. What are the pros and cons of using such a high alpha value (α)?