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 0.7 days
Wait time (from order to start of production) 16.6 days
Process time 2.7 days
Move time 1.3 days
Queue time 4.5 days
Required:
1. Compute the throughput time. (Round your answer to 1 decimal place.)

2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your answer to the nearest whole percentage (i.e., 0.12 should be entered as 12).)

3.
What percentage of the throughput time was spent in non–value-added activities? (Round your answer to the nearest whole percentage (i.e., 0.12 should be entered as 12).)

4.
Compute the delivery cycle time. (Round your intermediate calculations and final answer to 1 decimal place.)

5.
If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Do not round intermediate calculations. Round your

Answer 1

Throughput (manufacturing cycle) time = 9.2

Manufacturing Cycle Efficiency Time= 30%

Non Value Added Activities = 70%

Delivery Cycle Time = 25.9

NEW MCE using LEan Production= 57.44 %

Step-by-step explanation:

1. Throughput (manufacturing cycle) time = Inspection Time + Process Time + Move Time + Queue time

Throughput (manufacturing cycle) time = 0.7+2.7+ 1.3+4.5= 9.2

2. Manufacturing Cycle Efficiency Time= Value added Time/ Manufacturing Cycle time

Manufacturing Cycle Efficiency Time= Process Time/ Processing Time + Inspection Time + Move Time + Queue time

Manufacturing Cycle Efficiency Time= 2.7/ 9.2= 29.47% = 29.5%= 30%

3. MCE means that 30% of throughput consists of actual processing and 70 % consists of Non value added activities.

Non Value Added Time= Wait time + Inspection Time + Move Time + Queue Time

Non Value Added Time=16.6 + 0.8+ 1.3+ 4.5= 23.2

4. Delivery Cycle Time= NonValue Added time + Value Added Time (Process Time)

Delivery Cycle Time= 23.2 + 2.7= 25.9

5. If the queue time is eliminated using Lean Production the MCE is calculated as

Manufacturing Cycle Efficiency Time= Process Time/ Processing Time + Inspection Time + Move Time

Manufacturing Cycle Efficiency Time= 2.7/4.7= 57.44%

This means that MCE increases to 57.44 % . This improves the MCE and reduces the throughput time by using Lean Productions.