Exercise 11-3 Measures of Internal Business Process Performance [LO11-3]
Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported:
| Inspection time | 0.5 | days |
| Wait time (from order to start of production) | 15.9 | days |
| Process time | 2.9 | days |
| Move time | 0.8 | days |
| Queue time | 3.9 | days |
Required:
1. Compute the throughput time. (Round your answer to 1 decimal place.)
2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.)
3. What percentage of the throughput time was spent in non–value-added activities? (Round your percentage answer to nearest whole percent.)
4. Compute the delivery cycle time. (Round your intermediate calculations and final answer to 1 decimal place.)
5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Do not round intermediate calculations. Round your percentage answer to 1 decimal place.)
| 1 | ||
| Inspection time | 0.5 | |
| Process time | 2.9 | |
| Move time | 0.8 | |
| Queue time | 3.9 | |
| Throughput time | 8.1 | days |
| 2 | ||
| Process time | 2.9 | |
| Divide by Throughput time | 8.1 | |
| Manufacturing cycle efficiency (MCE) | 36% | |
| 3 | ||
| Non-value-added throughput time | 64% | =1-36% |
| 4 | ||
| Throughput time | 8.1 | |
| Wait time | 15.9 | |
| Delivery cycle time | 24.0 | days |
| 5 | ||
| New Manufacturing cycle efficiency | 69.0% | =2.9/(0.5+2.9+0.8) |
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