Question

Williams Optical Inc. is considering a new lean product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 45 units. The process time for each step is as follows: Process Step 1 5 minutes Process Step 2 8 minutes Process Step 3 4 minutes Process Step 4 3 minutes The time required to move each batch between steps is 5 minutes. In addition, the time to move raw materials to Process Step 1 is also 5 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 5 minutes. The new lean layout will allow the company to reduce the batch sizes from 45 units to 3 units. The time required to move each batch between steps and the inventory locations will be reduced to 2 minutes. The processing time in each step will stay the same. Determine the value-added, non-value-added, and total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.

Answer 1

The value-added, non-value-added, total lead time, and the value-added ratio under the present production approaches is as follows:

value-added=20 minutes

non-value-added=905 minutes

total lead time=925 minutes

value-added ratio=2.2%

The value-added, non-value-added, total lead time, and the value-added ratio under the proposed production approaches is as follows:

value-added=20 minutes

non-value-added=50 minutes

total lead time=70 minutes

value-added ratio=28.6%

Step-by-step explanation:

In order to calculate the the value-added, non-value-added, total lead time, and the value-added ratio under the present production approaches we would have to use the following formula:

value-added=Process times, step 1 +Process times, step 2+Process times, step 3+Process times, step 4

value-added=5+8+4+3

value-added=20 minutes

non-value-added=Total within batch wait time+movie time

non-value-added=(5+8+4+3)*(45-1)+25

non-value-added=905 minutes

total lead time= value-added+ non-value-added

total lead time=20+905

total lead time=925 minutes

value-added ratio=value-added/total lead time

value-added ratio=20/925

value-added ratio=2.2%

In order to calculate the the value-added, non-value-added, total lead time, and the value-added ratio under the proposed production approaches we would have to use the following formula:

value-added=Process times, step 1 +Process times, step 2+Process times, step 3+Process times, step 4

value-added=5+8+4+3

value-added=20 minutes

non-value-added=Total within batch wait time+movie time

non-value-added=(5+8+4+3)*(3-1)+10

non-value-added=50 minutes

total lead time= value-added+ non-value-added

total lead time=20+50

total lead time=70 minutes

value-added ratio=value-added/total lead time

value-added ratio=20/70

value-added ratio=28.6%