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The Cute Corporation produces small plastic dolls in its Florida manufacturing plant
The Cute Corporation produces small plastic dolls in its Florida manufacturing plant. The company is currently evaluating ways to improve productivity. The accountant of the firm's parent organization suggested that management implement a new compensation plan based on throughput performance measure as an incentive to increase productivity. To demonstrate how such a measure might work, the accountant gathered the following production data for a recent month: Total units attempted 6,000,000 Good units manufactured 4,800,000 Processing time (total hours) 800 Value-added processing 600
Required:
1. How many defective units were produced?
2. Can you compute manufacturing cycle efficiency (MCE).
3. Can you compute process productivity.
4. Can you compute process quality yield.
5. Can you compute hourly throughput.
Expert Solution
Answer:
Defective Units = Total Units - Good Units manufactured
= 6000000-4800000= 1200000
Manufacturing Cycle Efficiency = Value added time/Total Time
= 600/800 = 75%
Process Productivity = Output(no of Units)/Inputs(total hours)
= 4800000/800 = 6000 per hour
Process quality yield = Good units/Total Units attempted
= 4800000/6000000 = 80%
Hourly throughput = Units produced/Total Hours
= 4800000/800 = 6000 per hour
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