LaCrosse, Inc., sales manager Josh Brown has been receiving calls from customers

Question

LaCrosse, Inc., sales manager Josh Brown has been receiving calls from customers complaining about the length of time it takes to receive an order. To help him understand the issue, he gathered the following information from DanGold Enterprises’ most recent order.

Days Required Process customer order 0.2 Wait for direct materials to arrive 4.0 Fabrication of parts 3.0 Move order to assembly department 0.8 Wait for machine time 7.0 Assembly of parts 3.0 Move order to finishing department 0.4 Wait for machine time 3.0 Finishing of units 5.0 Move to packing department 0.7 Packing 1.8 Move to shipping department 0.2 Load delivery truck 0.6 Drive to customer 1.0 Unload delivery truck 0.7 Return to plant 2.0

Explanation / Answer

Answer a Delivery Cycle Time is the interval between the time of accepting an order and the time of making the final delivery. Delivery cycle time for DanGold’s order = Time Interval between processing customer order till unloading delivery truck at customer place   Delivery cycle time for DanGold’s order = 0.2 + 4.0 + 3.0 + 0.8 + 7.0 +3.0 +0.4 +3.0 + 5.0 + 0.7+1.8+0.2+0.6+1.0+0.7 = 31.4 Answer b Manufacturing cycle time refers to the time required or spent to convert raw materials into finished goods. Manufacturing cycle time for DanGold’s order = Time Interval between Fabrication of parts till Packing Manufacturing cycle time for DanGold’s order = 3.0 + 0.8 + 7.0 +3.0 +0.4 +3.0 + 5.0 + 0.7+1.8 = 24.7 Answer c Value added time is the processes and activities in the production or manufacturing process that improve the product or add usefulness to it. Value-added time for DanGold’s order = Fabrication of parts + Assembly of parts + Finishing of units + Packing Value-added time for DanGold’s order = 3.0 + 3.0 + 5.0 + 1.8 = 12.8

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