Kanban Made Simple

APPENDIX E

EOQ VS. KANBAN

A kanban model can sometimes lead you to a solution that requires an unrealistic number of changeovers. Since kanban formulation logic only considers time and does not consider the cost of changeovers, the final calculation can result in a solution that minimizes run size and inventory levels but schedules a large number of changeovers. An EOQ model can be utilized to give you a different solution that can be used as a sanity check on the kanban solution. EOQ models seek to find an optimum solution by determining the mathematical minimum total cost, taking into account holding cost and changeover costs. Although some ...