Can I use historical demand in the determination of Kanban lot sizes?
Yes. There are numerous environments where it is literally impossible to forecast anything but the expected dollar value of sales on a month-to-month basis. This can be due to the complexity of the Bill of Material structure or overwhelming options within the product offering. What is required in these environments is to apply what we call a “Times Factor” to the historical usage that is in proportion to the anticipated sales level. This must be complemented with an evaluation of demand patterns to ascertain the required safety stock level settings.
