Lead Time Sound Tek Inc. manufactures electronic stereo equipment. The manufactu

Question

Lead Time Sound Tek Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuilt (PC) board assembly, final assembly, testing and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 50 printed circuit boards. Each board requires 4 minutes of board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 9 minutes to complete. The final assembly for each stereo unit requires 20 minutes and is also done in batches of 50 units. A batch of 50 stereos is moved into the test building. which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30 minutes. The units wait while the setup is performed. In the final test, the 50-unit batch is tested one at a time. Each test requires6 minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of 50 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and labeling requires 9 minutes per unit. 1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of s0 units. Categorize the non-value-added time into wait and move time. Round the percentage to one decimal place Value-added minutes Non-value-added minutes: Wait time min Move time min Total non-value-added time Total lead time Value-added ratio (as a percent) min

Explanation / Answer

1. Value added time Assembly time 4 Min Final Assembly 20 Min Time to test one unit 6 Min pack &Shipping labeling 9 Min 39 Min 2 Non value Added time Wait time Within bach Wait time -Assembly ( 50*4MIn) 200 Min Within bach Wait time -Final Assembly(50*20MIn) 1000 Min Within bach Wait time - testing(50*6MIn) 300 Min Within bach Wait time -Shipping (50*9MIn) 450 Min test setup 30 Min Total Wait time 1980 Min Move time Move from Assembly to Final Assembly 9 Min Move from Final Assembly to testing 20 Min Total move time 29 Min Total Non Value added time 2009 Min Total Lead time 2048 Min Value added ratio (39/2048 *100) 1.90%

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