Exercise 12-3 Measures of Internal Business Process Performance [LO12-3 Manageme
ID: 2412268 • Letter: E
Question
Exercise 12-3 Measures of Internal Business Process Performance [LO12-3 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 0.3 day 14.0 days 2.7 days 1.00 day 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 efficiencyExplanation / Answer
(1)
Process Time
2.7 days
Inspection Time
0.3 days
Move Time
1 day
Queue Time
5 days
Throughput Time
9 days
(2) MCE = value added time/Throughput Time
Value added Time = Process Time = 2.7 days
MCE = 2.7/9 = 30%
(3) Non value added time in Throughput = Throughput time – Process Time
= 9 – 2.7 = 6.3 days
= 6.3/9 = 70%
(4)
Wait Time
14 days
Process Time
2.7 days
Inspection Time
0.3 days
Move Time
1 day
Queue Time
5 days
Throughput Time
23 days
(5) MCE = value added time/Throughput Time
Value added Time = Process Time = 2.7 days
New Throughput Time = 9 – 5 = 4 days
2.7/4 = 67.5%
Process Time
2.7 days
Inspection Time
0.3 days
Move Time
1 day
Queue Time
5 days
Throughput Time
9 days
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