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:

Compute the throughput time. (Round your answer to 1 decimal place.)

     

Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.)

     

What percentage of the throughput time was spent in non–value-added activities? (Round your percentage answer to nearest whole percent.)

     

Compute the delivery cycle time. (Round your intermediate calculations and final answer to 1 decimal place.)

     

If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  Inspection time 0.2 days   Wait time (from order to start of production) 15.2 days   Process time 3.1 days   Move time 0.9 days   Queue time 3.6 days

Explanation / Answer

Please find the calculations below

Part A: Throughput time = Process time + Inspection time + Move time + Queue time = 3.1 + .2 + .9 + 3.6 = 7.8
Part B: MCE = Value-added time (Process time)/ Throughput time = 3.1 days/ 7.8 days = 0.397
Part C: Percentage of time spent on non-value-added activities = 100% - MCE% = 100% - 39.7% = 60.003%
Part D: Delivery cycle time = Wait time + Throughput time = 15.2 days + 7.8 days = 23 days
Part E: Throughput time would change to: 4 days
MCE will become: 4/7.8 = .5128

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