Orion Devices Inc. is considering a new just-in-time product cell. The present m
ID: 2484366 • Letter: O
Question
Orion Devices Inc. is considering a new just-in-time product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 63 units. Theprocess time for each step is as follows:
The time required to move each batch between steps is 16 minutes. In addition, the time to move raw materials to Process Step 1 is also 16 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 16 minutes.
The new just-in-time layout will allow the company to reduce the batch sizes from 63 units to 4 units. The time required to move each batch between steps and the inventory locations will be reduced to 3 minutes. The processing time in each step will stay the same.
Determine the value-added, non-value-added, total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.
Process Step 1 7 minutes Process Step 2 5 minutes Process Step 3 4 minutes Process Step 4 9 minutesExplanation / Answer
Presnet Approach Proposed Approach Value Added Time 25 Min 25 Min Non Value Added Time 48 Min 9 Min Total lead Time 105 Min 40 Min Value added ratio (as percent) 23.8% % 62.5% %
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