Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount

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 curre nt year the following data were reported Inspection time Wait time (from order to start of production Process time Move time Queue time 0.3 days 14.0 days 2.7 days 1.0 days 5.0 days Required 1. Compute the throughput time hroughput time days 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.) Manufacturing cycle efficiency 3. What percentage of the throughput time was spent in non-value-added activities? Non-value-added throughput time

Explanation / Answer

1. Throughput time = Process time + Inspection time + Move time + Queue time = 2.7 + 0.3 + 1.0 + 5.0 = 9.0 days

2. MCE = Value-added time / Throughput time = 2.7 / 9.0 = 30%

3. The percentage is 70% because the MCE is 30%, then 30% of the throughput time was spent in value-added activities.

4. Delivery cycle time = Wait time + throughput time = 14.0 + 9.0 = 23.0 days

5. MCE = Value-added time / Throughput time = 2.7 / 4.0 = 67.5%

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