Question

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

	Month
	1		2		3		4
Throughput time (days)	?		?		?		?
Delivery cycle time (days)	?		?		?		?
Manufacturing cycle efficiency (MCE)	?		?		?		?
Percentage of on-time deliveries	91	%	86	%	82	%	78	%
Total sales (units)	3030		2900		2752		2649

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

	Average per Month (in days)
	1		2		3		4
Move time per unit	0.9		0.7		0.9		0.9
Process time per unit	2.9		2.8		2.7		2.6
Wait time per order before start of production	19.0		20.8		23.0		24.8
Queue time per unit	4.4		5.1		5.9		6.8
Inspection time per unit	0.7		0.9		0.9		0.7
Required 1 1-a. Compute the throughput time for each month. 1-b. Compute the delivery cycle time for each month. 1-c. Compute the manufacturing cycle efficiency (MCE) for each month. (Round your answers to 1 decimal place.) Throughput Time Delivery Cycle Time Manufacturing Cycle Efficiency (MCE) Month 1 days days % Month 2 days days % Month 3 days days % Month 4 days days %

2. Evaluate the company’s performance over the last four months. (Indicate the effect of each trend by selecting "Favorable" or "Unfavorable" or "None" for no effect (i.e., zero variance).

	The Throughput Time measure displays trends The Delivery cycle time—days measure displays trends Manufacturing cycle efficiency—days measure displays trends

3-a. (Month 5) Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. (Month 6) Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

(Round your answers to 1 decimal place.)

	Month 5 Month 6 Throughput time days days Manufacturing cycle efficiency (MCE) % %

Answer 1

Requirment 1.
	Throughput Time		Delivery Cycle Time		Manufacturing Cycle Efficiency (MCE)
Month 1	8.9	days	27.9	days	32.6	%
Month 2	9.5	days	30.3	days	29.5	%
Month 3	10.4	days	33.4	days	26	%
Month 4	11	days	35.8	days	23.6	%
Working:
			Average per month (in days)
			1	2	3	4
Move time per unit			0.9	0.7	0.9	0.9
Process time per unit			2.9	2.8	2.7	2.6
Queue time per unit			4.4	5.1	5.9	6.8
Inspection time per unit			0.7	0.9	0.9	0.7
Throughput time per unit			8.9	9.5	10.4	11
Wait time per order before start of production			19	20.8	23	24.8
Delivery cycle time (5+6)			27.9	30.3	33.4	35.8
MCE (2/5)			0.326	0.295	0.260	0.236
MCE = Value added time/Throughput time, where only process time is considered as value added time
Requirment 2.
The Throughput Time measure displays					Unfavorable
The Delivery Cycle Time - days displays					Unfavorable
Manufacturing Cycle Efficiency - days displays					Favorable
Requirment 3.
			Month 5		Month 6
Throughput Time			4.2	days	3.5	days
Manufacturing Cycle Efficiency			61.9	%	74.3	%
Working:
				Month 5	Month 6
Throughput time for month 4				11	11
Less: Queue time				6.8	6.8
Inspection Time				-	0.7
Throughput time				4.2	3.5
Process time (Value addded time)				2.6	2.6
MCE (Value added time/Throughput time)				0.619	0.743