Problem 10-14 Measures of Internal Business Process Performance [LO10-3] DataSpa
ID: 2340927 • Letter: P
Question
Problem 10-14 Measures of Internal Business Process Performance [LO10-3] DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations Throughput time (days) Delivery cycle time (days) Manufacturing cycle efficiency (MCE) Percentage of on-tine deliveries Total sales (units) 91% 86% 82% 78% 3468 33123143 3025 Management has asked for your help in computing throughput time, delilvery cycle time, and MCE. The following average times have been logged over the last four months Average per Month (in days) Hove tine per unit Process tine per unit Wait time per order before start of production Queue time per unit Inspection time per unit 0.5 .6 8.6 0.7 2.8 2.7 26 2.5 23.0 25.2 28.030.2 4.6 5.36.17. 0.5 8.68.6 .5 Required: 1-a. Compute the throughput time for each month. 1-b. Compute the delivery cycle time for each month 1-c. Compute the manufacturing cycle efficiency (MCE) for each month. 2 Evaluate the company's performance over the last four months 3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE 3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCEExplanation / Answer
1 a The Total Throughput times are
Month
1 2 3 4
Throughput Time -days
Process Time 2.8 2.7 2.6 2.5
Inspection Time .6 .5 .5 .6
Move Time .7 .5 .6 .6
Queue Time 4.6 5.3 6.1 7.0
Total Through Put Time 8.7 9.0 9.8 10.7
b.The MCE are :
Month
1 2 3 4
Manufacturing Cycle
efficiency MCE
Process Time/Throghput 32.18% 30% 26.53% 23.36%
C.The delivery cycle times are
Month
1 2 3 4
Delivery Cycle Time -days
Wait time from order to
start of production 23.0 25.2 28.0 30.2
Throughput Time 8.7 9.0 9.8 10.7
Total Delivery Cycle time 31.7 34.2 37.8 40.9
2 All of the performance measures show unfavourable trends.For example throughput time per unit is increasing ,manufacturing cycle efficiency is declining and delivery cycle time is increasing.
3
a Month
5
Throught put -days
Process time 2.5
Inspection Time .5
Move Time .6
Queue Time 0.0
Total Through Put Time 3.6
MCE
Process Time /ThroughPut Time 69.44%
b Month
6
Process Time 2.5
Inspection Time 0.0
Move time 0.6
Queue Time 0.0
Total Throughput Time 3.1
MCE Process Time /throughput Time 80.64%
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