Davis, Managerial Accounting, 3e Help I Syst CALCULATOR PRINTER VERSION BACK Pra

Question

Davis, Managerial Accounting, 3e Help I Syst CALCULATOR PRINTER VERSION BACK Practice Exercise 04 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 Requir 0.2 3.0 4.0 0.8 Process customer order Wait for direct materials to arrive Fabrication of parts Move order to assembly department Wait for machine time Assembly of parts Move order to finishing department Wait for machine time Finishing of units Move to packing department Packing Move to shipping department Load delivery truck 2.0 0.4 4.0 1.5 0.3 0.6 1.5 0.9 2.0 Drive to customer Unload delivery truck Return to plant 12:39 PM 4/16/20189 ch

Explanation / Answer

Answers:

(a) Delivery Cycle time should be calculated between two steps:

Proces Customer Oreder - Unload Delivery Truck

Remember, no need to include "Return to Plant" time as it not important from delivery to customer point of view.

So, Delivery cycle time: 28.8 days

(b) Ideally manufacturing time should be calculated from raw materials procurement to finished goods including packing time.

Hence here you need to exclude only shipping related time. Hence add all the days from wait time for raw material to packing.

Manufacturing Cycle Time: 25.3

(c) Since you have rightly answered this...

Value added Time: 10 days

(d). Manufacturing Cycle Efficiency = 32%

Below is explaination for arriving at 32% manufacturing efficiency:

= Value Added Time / Total cycle time x 100

= 10 / 30.8 x 100

= 32.467%

= 32%

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