Question

Lead Time Analysis

Furry Friends Inc. manufactures toy stuffed animals. The direct labor time required to cut, sew, and stuff a toy is 10 minutes per unit. The company makes two types of stuffed toys—a lion and a bear. The lion is assembled in lot sizes of 50 units per batch, while the bear is assembled in lot sizes of 8 units per batch. Since each product has direct labor time of 10 minutes per unit, management has determined that the lead time for each product is 10 minutes.

a. Lead time includes ___, ___, and ___.

1. Value-added time, wait time and other non-value-added time.
2. Production time, packing time and value-added time.
3. Idle time, direct labor hours, and wait time.
4. None of the above.

b. A toy manufacturing unit produces two types of products and the labor time for the each product is 10 minutes. The batch size of product A is 50 units and batch size of product B is 8 units. The company considers the lead time of the products is equal to the labor hour’s. Is the decision correct and supports your answer by selecting the reason.

1. Yes
2. No

Reason:

1. Lead time of the product includes value-added time, idle time and other non-value-added time.
2. Labor time and lead time adds value to the product.
3. Lead time and labor time are one and the same with different names.
4. None of the above.

Answer 1

Lead Time: Lead is the time period between the recipt of the an order till its dispatch, that is initiation of a process till the completion.

a  

Lead time includes ___, ___, and ___.

1. Value-added time, wait time and other non-value-added time.

b.

No. - Direct Labor is a part of lead time and not the lead time.

Reason:

1. Lead time of the product includes value-added time, idle time and other non-value-added time.

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