Question 1 Nelson Extruding produces containers for nurseries and landscaping bu

Question

Question 1 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: Time to Complete 27 minutes 36 minutes 6 minutes 10 minutes 46 minutes 4 minutes 6 minutes Activity Materials moved to production floor Production in station 1 Materials moved to station 2 Wait to begin at station 2 Production in station 2 Inspection Materials moved to finished goods inventory (a) What is the manufacturing cycle time (throughput time) to produce a batch of 1-nch plant flats and prepare it for sale? Manufacturing cycle time minutes (b) How much of the process time is value-added? Value-added time minutes

Explanation / Answer

(a) Manufacturing cycle time = Process time + Move time + Inspection time + Wait time = (36 +46) + (27+6+6) + 4 +10 = 135 minutes.

Manufacturing cycle time is the time taken to move the raw materials into the manufacturing site and between the work stations, the actual processing time, the inspection time and the queue time between these stages til the finished product is moved out of the manufacturing area.

(b) Value-added time = Process time = (36 +46) = 82 minutes.

Out of the total manufacturing cycle time, only proces time is the time during which the priduct is actually produced. The other time is serving the logistic and administrative purpose. Thus only, process time is considered as value-added time.

Manufacturing cycle efficiency = Value-added time divided by the total manufacturing cycle time = 82 divided by 135 = 60.7%

The manufacturing cycle efficiency measures the proportion of manufacturing time spent on value-added activities.

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