Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount
ID: 2461648 • Letter: M
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
1.Compute the throughput time.
2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your answer to 2 decimal places.)
3. What percentage of the throughput time was spent in non–value-added activities? (Enter your answer as a percentage (i.e., 0.12 should be entered as 12).)
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 (i.e., 0.123 should be entered as 12.3).)
Explanation / Answer
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 = process time / throughput time = 2.7 days / 9 days = 0.30
3) Non value added time = wait time + inspection time + move time + queue time = 14 + 0.3 + 1 + 5 = 20.3 days
The percentage of throughput time spent in non value added activities
= [(inspection time + move time + queue time) / throughput time ] x 100 = [(0.3 + 1 + 5) / 9] x 100 = 70%
4) Delivery cycle time = wait time + throughput time = 14 + 9 = 23 days
5) New MEC
= Value added time / new throughput time
= process time /(process time + inspection time + move time)
= 2.7 days / (2.7 + 0.3 + 1) days
= 0.675 = 67.5%
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