Question

Pardun Corporation's management keeps track of the time it takes to process orders. During the most recent month, the following average times were recorded per order:

Pardun Corporation's management keeps track of the time it takes to process orders. During the most recent month, the following average times were recorded per order:

	Days
Wait time	13.2
Inspection time	0.7
Process time	1.60
Move time	0.6
Queue time	2.2

Required:

a. Compute the throughput time.(Enter your answer rounded to 1 decimal places.)

b. Compute the manufacturing cycle efficiency (MCE). (Enter your answer rounded to 2 decimal places.)

c. What percentage of the production time is spent in non-value-added activities?

d. Compute the delivery cycle time. (Round your answer to 1 decimal place.)

Answer 1

a. Throughput time = Process time + Inspection time + Move time + Queue time

                              = 1.60 days + 0.7 days + 0.6 days + 2.2 days = 5.1 days

b. MCE = Value-added time (Process time) / Throughput time

          = 1.60 days / 5.1 days = 0.31

c. Percentage of time spent on non-value-added activities

    = 100% - MCE% = 100% - 31% = 69%

d. Delivery cycle time = Wait time + Throughput time

                                  = 13.2 days + 5.1 days = 18.3 days