Question

Mcphee company manufactures rugs in the cutting and assembly process. rugs are manufactured in 70-rug batch sizes. the cutting time is 14 minutes per rug. the assembly time is 24 minutes per rug. it takes 18 minutes to move a batch of rugs from cutting to assembly. what is the value-added lead time?

a. 14 minutes
b. 56 minutes
c. 38 minutes
d. 24 minutes

Answer 1

The value added lead time is 38 minutes. It takes 24 minutes to assemble the rugs and 14 minutes to cut them, the total time is 38 minutes. The value added lead time is the time spent on all value adding activitie. In this case, the value activities are those that help produce the product being sold because they are adding value to the product.