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 current year the following data were reported: Inspection time Wait time (from order tostart of production) Process time Move time Queue time 0.5 day 16.5 days 2.7 days 0.9 day 4.0 days Required: 1.Compute the throughput time. (Round your answer to 1 decimal place.) Throughput time days 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.) Manufacturing cycle efficiency

Explanation / Answer

Answer to Part 1.

Throughput Time = Process Time + Inspection Time + Move Time + Queue Time
Throughput Time = 2.7 + 0.5 + 0.9 + 4.0
Throughput Time = 8.1 days

Answer to Part 2.

Manufacturing Cycle Efficiency = Value Added Time / Throughput Time
Manufacturing Cycle Efficiency = 2.7 / 8.1
Manufacturing Cycle Efficiency = 0.3333 or 33%

Answer to Part 3.

Non-Value Added Throughput time = 100 – Manufacturing Cycle Efficiency
Non-Value Added Throughput time = 100 - 33
Non-Value Added Throughput time = 67%

Manufacturing Cycle Efficiency is the time spent on Value added activities, therefore 67% is the time spent on Non-Value added activities.

Answer to Part 4.

Delivery Cycle Time = Wait Time + Throughput Time
Delivery Cycle Time = 16.5 + 8.1
Delivery Cycle Time = 24.6 days

Answer to Part 5.

If the Queue Time is eliminated, the Throughput time will be 4.1 days (8.1 – 4.0).

Manufacturing Cycle Efficiency = Value Added Time / Throughput Time
Manufacturing Cycle Efficiency = 2.7 / 4.1
Manufacturing Cycle Efficiency = 0.6585 or 66%

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