Question

In: Accounting

Oakwood Company produces maple bookcases to customer order. The following information is available for the production...

Oakwood Company produces maple bookcases to customer order. The following information is available for the production of the bookcases.


Process time	9.0 days
Inspection time	1.5 days
Move time	3.7 days
Wait time	14.0 days

Required:
1. Compute the company’s manufacturing cycle time.
2. Compute the company’s manufacturing cycle efficiency.
3. Management believes it can reduce move time by 1.10 days and wait time by 2.50 days by adopting lean manufacturing techniques. Compute the company’s manufacturing cycle efficiency assuming the company’s predictions are correct.

Complete this question by entering your answers in the tabs below.

Required 1

Compute the company’s manufacturing cycle time. (Round your answers to 1 decimal place.)

Manufacturing Cycle Time
	Time
?	?
?	?
?	?
?	?
Manufacturing cycle time

Complete this question by entering your answers in the tabs below.

Required 2

Manufacturing Cycle Efficiency
Choose Numerator:	/	Choose Denominator:	=	Manufacturing cycle efficiency
?	/	?	=	Manufacturing cycle efficiency
?		?

d Complete this question by entering your answers in the tabs below.

Required 3

Management believes it can reduce move time by 1.10 days and wait time by 2.50 days by adopting lean manufacturing techniques. Compute the company’s manufacturing cycle efficiency assuming the company’s predictions are correct. (Round your answers to 1 decimal place.)

Manufacturing Cycle Efficiency
Choose Numerator:	/	Choose Denominator:	=	Manufacturing cycle efficiency
?	/	?	=	Manufacturing cycle efficiency
?		?

Note: Please solve the problem completely. Thank you

Solutions

Expert Solution

Solution:

Throughput Time / Manufacturing Cycle Time

Throughput time is the amount of time required for a product to pass through a manufacturing process, thereby being converted from raw materials into finished goods. Throughput time includes following times:

- Processing time --- it is the time taken to process/make the product (Conversion time from raw material to finished goods)

- Inspection Time – Time taken for inspecting the raw material, WIP and finished product.

- Move time – time required to move products into and outside of the manufacturing unit.

- Queue time – time spent waiting prior to the processing, inspection and move activities.

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

Manufacturing Cycle Efficiency

It measures the proportion of production time spent on value added activities.

The process time in the throughput time calculation is considered value added time, since this is the only step that actually produces the product.

The rest time is administrative and logistical non value added time.

Manufacturing Cycle Efficiency = Total Value Added Time / Total Throughput Time x 100

Part 1 –

Manufacturing Cycle Time
	Time
Process time	9	days
Inspection time	1.5	days
Move time	3.7	days
Wait time	14	days
Manufacturing cycle time	28.2	days

Part 2 –

Manufacturing Cycle Efficiency
Choose Numerator:	/	Choose Denominator:	=	Manufacturing cycle efficiency
Total Value added time	/	Total manufacturing cycle time or total throughput time	=	Manufacturing cycle efficiency
9	/	28.2	=	0.3191 or 31.91%

Part 3 –

Total Revised Manufacturing Cycle Time =

Manufacturing Cycle Time
	Time
Process time	9	days
Inspection time	1.5	days
Move time (3.7 – 1.1)	2.6	days
Wait time (14 – 2.5)	11.5	days
Manufacturing cycle time	24.6	days

Manufacturing Cycle Efficiency
Choose Numerator:	/	Choose Denominator:	=	Manufacturing cycle efficiency
Total Value added time	/	Total manufacturing cycle time or total throughput time	=	Manufacturing cycle efficiency
9	/	24.6	=	0.3659 or 36.59%

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

ekkarill92 answered 1 year ago

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