Question

Which of the following statement is FALSE? A. Process time is the only value-added activity in the four components of throughput time. B. Throughput time is the elapsed time from when a customer order is received to when the completed order is shipped. C. Throughput time is a nonfinancial performance measure. D. A company’s manufacturing cycle efficiency can be improved by minimizing queue time.

Answer 1

A. PROCESS TIME IS THE ONLY VALUE ADDED ACTIVITY IN THE FOUR COMPONENTS OF THROUGHPUT TIME IS TRUE SINCE THE OTHER 3 COMPONENTS INSPECTION, MOVE AND QUEUE TIME ARE NOT VALUE ADDED ACTIVITY.

B. THROUGHPUT TIME IS THE ELAPSED TIME FROM WHEN A CUSTOMER ORDER IS RECEIVED TO WHEN THE COMPLETED ORDER IS SHIPPED IS FALSE SINCE DELIVERY CYCLE TIME IS THE TIME FROM WHEN A CUSTOMER ORDER IS RECEIVED AND UNTIL IT IS SHIPPED.

C. THROUGHPUT TIME IS A NON FINANCIAL PERFORMANCE MEASURE IS TRUE.

D. A COMPANY'S MANUFACTURING CYCLE EFFICIENCY CAN BE IMPROVED BY MINIMIZING QUEUE TIME IS TRUE.

HENCE OPTION B IS FALSE.