Exeter Corporation has recently begun a continuous improvement campaign. As a co

Question

Exeter Corporation has recently begun a continuous improvement campaign. As a consequence, there have been many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory Management has been gathering the following data over the past four months Month 2 Quality control measures: Customer complaints as a percentage of units sold Warranty claims as a percentage of units sold Defects as a percentage of units produced 1.4% 2.3% 4.6% 1.3% 2.1% 4.2% 1.1% 2.0% 3.7% 1.0% 1.8% 3.4% Material control measures Scrap as a percentage of total cost 3.2% 2.9% 3.0% 2.7% Machine performance measures Percentage of machine availability Use as a percentage of availability Average setup time (hours) 80% 75% 2.7 82% 73% 2.5 81% 71% 2.5 79% 70% 2.6 Delivery performance measures Throughput time Manufacturing cycle efficiency Delivery cycle time Percentage of on-time deliveries 84% 87% 91% 95% The president has attended conferences at which the importance of throughput time, manufacturing cycle efficiency, and delivery cycle time were stressed, but no one at the company is sure how they are computed. The data to compute these measures have been gathered and appear below: Month 2 Wait time per order before start of production, in days Inspection time per unit, in days Process time per unit, in days Queue time per unit, in days Move time per unit, in days 4 9.6 0.8 0.6 5.7 16.7 0.6 5.6 1.4 15.2 12.3 0.6 0.6 5.6 1.3 0.3 0.6 5.7 1.3

Explanation / Answer

All answers in the table Average per Month (in days) Ans 1 Ans 3a 3b Months 1 2 3 4 5 6   Move time per unit A 1.4 1.3 1.3 1.4 1.4 1.4   Process time per unit B 0.6 0.6 0.6 0.6 0.6 0.6   Wait time per order before start C 16.7 15.2 12.3 9.6 9.6 9.6   Queue time per unit D 5.6 5.7 5.6 5.7   Inspection time per unit E 0.1 0.3 0.6 0.8 0.8 Through Put Time T= A+B+D+E 7.7 7.9 8.1 8.5 2.8 2 days Manufacturing Cycle Time B/T*100 7.8 7.6 7.4 7.1 21.4 30.0 % Delivery Cycle Time C+T 24.4 23.1 20.4 18.1 12.4 11.6 days Throughput Time= Process Time+Inspection Time+Move Time+Queue Time Manufacturing Cycle Effiviency=Value added time(Process Time)/Throughput Time Delivery Cycle Time=Wait Time+Throughput time

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