Today's Kanban research is the modern equivalent of yesterday's economic order quantity research." Do you agree? Explain your answer.
Economic Order Quantity means the order amount that minimizes all the inventory holding costs and ordering. Kanban aligns inventory levels with actual consumption. The two systems help find the level of inventory that would reduce the holding and ordering costs. Kanban is a demand forecasting system that order on demand and economic order quantity orders on demand for the product that are sold and delivered at the point where inventory reaches zero. The two are based on assumption of lead-time, demand, purchase price, and costs are all constant. Kanban limits overproduction and demand is driven and it helps to relieve problems in production and overstock. I do agree that Kanban is the modern equivalent of economic order quantity because both means the same but Kanban is more of an updated version of economic order quantity.
2. There is considerable evidence that getting the correct operating conditions is more important than the choice between MRP, kanban, or reorder point methods in the MPC system. How general do you believe this situation to be?
I work at a production industry and I do agree that operating conditions are more important than MRP, Kanban, and reorder point methods in the MPC system. In a production system good operating conditions are very important and with good workers who know the process and can perform their job correctly the process will go smoothly with efficiency and very effectively. The best equipment’s and tools will not override a poorly run production system. For example, a production system depends on products distributed to satisfy customers. If the money in a company is not being profited by sales, inventory cannot be bought and shelves will be empty. These issues cannot be solve by MRP, Kanban, or