Nelson Extruding produces containers for nurseries and landscaping businesses. T

Question

Nelson Extruding produces containers for nurseries and landscaping businesses. The company competes based on its low-cost, high-quality products. As the company’s expenses have risen, management has become concerned with the need to streamline various processes in order to reduce costs without reducing quality. The following table shows the time needed to produce a batch of 1-inch plant flats:

Activity Time to Complete Materials moved to production floor 23 minutes Production in station 1 32 minutes Materials moved to station 2 3 minutes Wait to begin at station 2 8 minutes Production in station 2 43 minutes Inspection 3 minutes Materials moved to finished goods inventory 5 minutes
  

Explanation / Answer

(a)

Manufacturing cycle time = Process time + Inspection time + Move time + Queue time

                                           = 32 minutes + 43 minutes + 3 minutes + 3 minutes + 8 minutes

                                           = 89 minutes

(b)

Value-added time = Process time = Production in station 1 + Production in station 2

                                  = 32 minutes + 43 minutes = 75 minutes.

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