Question

Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported: Inspection time 0.3 days Wait time (from order to start of production) 14.0 days Process time 2.7 days Move time 1.0 days Queue time 5.0 days Required: 1. Compute the throughput time. 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.) 3. What percentage of the throughput time was spent in non–value-added activities? (Round your percentage answers to the nearest whole percent.) 4. Compute the delivery cycle time. 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage answer to 1 decimal place.)

Answer 1

1) THROUGHPUT TIME =9 DAYS

2) MCE = 0.3 OR 30%

3) THE PERCENTAGE IS 70%

4) DELIVERY CYCLE TIME = 23 DAYS

5) NEW MCE = 0.675 OR 67.5%

Step-by-step explanation:

1)-

THROUGHPUT TIME = PROCESS TIME + INSPECTION TIME + MOVE TIME + QUEUE TIME

= 2.7 + 0.3 + 1 + 5

= 9 DAYS

2)-

MCE = VALUE ADDED TIME / THROUGHPUT TIME

= 2.7 / 9

= 0.3 OR 30%

3)-

THE PERCENTAGE IS 70% BECAUSE THE MCE IS 30%, THEN 30% OF THE THROUGHPUT TIME WAS SPENT IN VALUE-ADDED ACTIVITIES.

4)-

DELIVERY CYCLE TIME = WAIT TIME + THROUGHPUT TIME

= 14.0 + 9.0

= 23 DAYS

5)-

NEW THROUGHPUT TIME = PROCESS TIME + INSPECTION TIME + MOVE TIME

= 2.7 + 0.3 + 1

= 4 DAYS

NEW MCE = VALUE ADDED TIME / NEW THROUGHPUT TIME

= 2.7 / 4

= 0.675 OR 67.5%