Exeter Corporation has recently begun a continuous improvementcampaign. As a consequence, there have been many changes inoperating procedures. Progress has been slow, particularly intrying to develop new performance measures for the factory.
Management has been gathering thefollowing data over the past four months:
Month
1 2 3 4 Quality controlmeasures: Customer complaints as apercentage of units sold 1.0 % 1.0 % 1.0 % 1.1 % Warranty claims as a percentageof units sold 1.8 % 1.8 % 1.8 % 1.8 % Defects as a percentage ofunits produced 4.3 % 3.9 % 3.5 % 3.0 % Material controlmeasures: Scrap as a percentage of totalcost 3.0 % 2.7 % 2.8 % 2.5 % Machine performancemeasures: Percentage of machineavailability 79 % 79 % 79 % 78 % Use as a percentage ofavailability 74 % 76 % 68 % 70 % Average setup time (hours) 2.3 2.3 2.3 2.3 Delivery performancemeasures: Throughput time ? ? ? ? Manufacturing cycleefficiency ? ? ? ? Delivery cycle time ? ? ? ? Percentage of on-timedeliveries 84 % 85 % 91 % 95 %
The president has attendedconferences at which the importance of throughput time,manufacturing cycle efficiency, and delivery cycle time werestressed, but no one at the company is sure how they are computed.The data to compute these measures have been gathered and appearbelow:
Month
1 2 3 4 Wait time per orderbefore start of production, in days 16.8 15.0 12.0 9.0 Inspection time perunit, in days .1 .1 .5 .6 Process time perunit, in days .5 .5 .5 .5 Queue time per unit,in days 5.4 5.5 5.4 5.5 Move time per unit,in days 1.4 1.3 1.3 1.4
Required: 1. For each month, compute the following performance measures:(Round your intermediate calculations and final answers to1 decimal place. Omit the "%" sign in your response.)
Month 1 2 3 4 Throughput time Manufacturing cycleefficiency (MCE) % % % % Delivery cycletime
3. Refer to the inspection time,process time, and so forth, given above for month 4.
a. Assume that in month 5 the move time, process time, and soforth, are the same as for month 4, except that through theimplementation of Lean Production, the company is able tocompletely eliminate the queue time during production. Compute thenew throughput time and MCE. (Round your intermediatecalculations and final answers to 1 decimal place. Omit the "%"sign in your response.)
Throughput time Manufacturing cycleefficiency (MCE) %
b. Assume that in month 6 the move time, process time, and soforth, are the same as for month 4, except that the company is ableto completely eliminate both the queue time during production andthe inspection time. Compute the new throughput time and MCE.(Round your intermediate calculations and final answers to1 decimal place. Omit the "%" sign in your response.)
Throughput time Manufacturing cycleefficiency (MCE) %
Exeter Corporation has recently begun a continuous improvementcampaign. As a consequence, there have been many changes inoperating procedures. Progress has been slow, particularly intrying to develop new performance measures for the factory. |
Management has been gathering thefollowing data over the past four months: |
Month | ||||||||
| 1 | 2 | 3 | 4 | |||||
| Quality controlmeasures: | ||||||||
| Customer complaints as apercentage of units sold | 1.0 | % | 1.0 | % | 1.0 | % | 1.1 | % |
| Warranty claims as a percentageof units sold | 1.8 | % | 1.8 | % | 1.8 | % | 1.8 | % |
| Defects as a percentage ofunits produced | 4.3 | % | 3.9 | % | 3.5 | % | 3.0 | % |
| Material controlmeasures: | ||||||||
| Scrap as a percentage of totalcost | 3.0 | % | 2.7 | % | 2.8 | % | 2.5 | % |
| Machine performancemeasures: | ||||||||
| Percentage of machineavailability | 79 | % | 79 | % | 79 | % | 78 | % |
| Use as a percentage ofavailability | 74 | % | 76 | % | 68 | % | 70 | % |
| Average setup time (hours) | 2.3 | 2.3 | 2.3 | 2.3 | ||||
| Delivery performancemeasures: | ||||||||
| Throughput time | ? | ? | ? | ? | ||||
| Manufacturing cycleefficiency | ? | ? | ? | ? | ||||
| Delivery cycle time | ? | ? | ? | ? | ||||
| Percentage of on-timedeliveries | 84 | % | 85 | % | 91 | % | 95 | % |
The president has attendedconferences at which the importance of throughput time,manufacturing cycle efficiency, and delivery cycle time werestressed, but no one at the company is sure how they are computed.The data to compute these measures have been gathered and appearbelow: |
Month | ||||
| 1 | 2 | 3 | 4 | |
| Wait time per orderbefore start of production, in days | 16.8 | 15.0 | 12.0 | 9.0 |
| Inspection time perunit, in days | .1 | .1 | .5 | .6 |
| Process time perunit, in days | .5 | .5 | .5 | .5 |
| Queue time per unit,in days | 5.4 | 5.5 | 5.4 | 5.5 |
| Move time per unit,in days | 1.4 | 1.3 | 1.3 | 1.4 |
| Required: | |
| 1. | For each month, compute the following performance measures:(Round your intermediate calculations and final answers to1 decimal place. Omit the "%" sign in your response.) |
| Month | ||||
| 1 | 2 | 3 | 4 | |
| Throughput time | ||||
| Manufacturing cycleefficiency (MCE) | % | % | % | % |
| Delivery cycletime | ||||
| 3. | Refer to the inspection time,process time, and so forth, given above for month 4. |
| a. | Assume that in month 5 the move time, process time, and soforth, are the same as for month 4, except that through theimplementation of Lean Production, the company is able tocompletely eliminate the queue time during production. Compute thenew throughput time and MCE. (Round your intermediatecalculations and final answers to 1 decimal place. Omit the "%"sign in your response.) |
| Throughput time | ||
| Manufacturing cycleefficiency (MCE) | % | |
| b. | Assume that in month 6 the move time, process time, and soforth, are the same as for month 4, except that the company is ableto completely eliminate both the queue time during production andthe inspection time. Compute the new throughput time and MCE.(Round your intermediate calculations and final answers to1 decimal place. Omit the "%" sign in your response.) |
| Throughput time | ||
| Manufacturing cycleefficiency (MCE) | % | |
