Inventory

Container capacity (Cc) is one of the four basic variables within the generic kanban sizing calculation. However, Cc is often NOT treated as variable, but more as a constant, pre-determined quantity, especially if the lean practitioner seeks to use existing supplier packaging, reusable dunnage, standard bin sizes or racks, etc.

Often that is the best, least waste way. Although, sometimes it is not prudent from an inventory management and/or ergonomic perspective.

A measure of the capital efficiency of an operation. One turn equals to the complete consumption and replenishment of the inventory in question. The number of inventory turns is usually based on a calendar year.  Turns is just a ratio of consumption vs. on hand.
Inventory Turns = Annualized Cost of Goods Sold($) / Average Inventory ($), and sometimes
Annual Cost of Goods Sold($) / Current Stock on Hand Value($)
also 365 / Inventory Days of Supply

Got asked what would happen to inventory when the number of stocking locations change.  I thought for a minute and remembered a quick estimate.  The Square Root Law states that total safety stock can be approximated by multiplying the total inventory by the square root of the number of future warehouse locations divided by the current number.

X2 = (X1) * √ (n2/n1)

n1 = number of existing facilities
n2 = number of future facilities
X1 = existing inventory
X2 = future inventory

Here are two examples:

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