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Management of Mittel Company would like to reduce the amount of time between when a customer places an order and when the order is shipped

Management

Management of Mittel Company 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 Wait time (from order to start of production) Process time Move time Queue time 
0.7 days 16.9 days 3.2 days 1.4 days 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.) 
L .1 1. Throughput time . days 2. Manufacturing cycle efficiency . 3. Non-value-added throughput time ' 4. Delivery cycle time . days 5. New manufacturing cycle efficiency " 

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1. Computation of Throughput Time:

Throughput Time = Process time + Inspection Time + Move Time + Queue Time

= 3.2 days + 0.7 days + 1.4 days + 3.9 days

= 9.2 days

 

2. Computation of Manufacturing Cycle Efficiency:

Value Added Time = Process Time = 3.2 days

Manufacturing Cycle Efficiency (MCE) = Value Added Time / Throughput Time

= 3.2 / 9.2

= 0.3478 or 34.78%

 

3. Computation of Non-value Added Throughput Time:

Percentage of the throughput time was spent in non-value-added activities = 1 - 34.78% = 65.22%

 

4. Computation of Delivery Cycle time:

Delivery Cycle Time = Wait Time + Throughput Time

= 16.9 days + 9.2 days

= 26.1 days

 

5. Computation of New Manufacturing Cycle Efficiency (MCE):

New Throughput Time = Process time + Inspection Time + Move Time

= 3.2 + 1.4 + 0.7

= 5.3 days

 

New MCE = Value Added Time / New Throughput Time

= 3.2 / 5.3

= 0.6038 or 60.38%