Question

Grey Company is evaluating two manufacturing process layout options, each of which has the following characteristics for producing a batch of output:

Process Activity Minutes per Batch
Alternative 1 Alternative 2
Setup time 50 20
Movement time (from start to finish) 20 28
Waiting time 6 32
Inspection time 10 14
Processing time 80 60
Total time (in minutes) 166 154

Required:
a. Determine the production (manufacturing) lead time per batch for each decision alternative.
b. Determine the process cycle efficiency (PCE) for each system.

Answer 1

Production (manufacturing) Lead Time per batch

Production Lead Time = Total Time required to manufacture which includes Setup time, Movement time, Inspection Time, Processing Time and Wait Time.

Decision Alternative 1: 166 Minutes

Decision Alternative 2: 154 Minutes

Process Cycle Efficiency

PCE = Value Added Time / Cycle Time

Except Processing Time all are Non Value Added

Decision Alternative 1 = 80/166 = 0.48

Decision Alternative 2 = 60/154 = 0.39