Question

In: Accounting

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible...

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 88 % 83 % 80 % 77 %
Total sales (units) 2830 2709 2570 2473

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 0.6 0.7 0.7
Process time per unit 3.8 3.6 3.4 3.2
Wait time per order before start of production 18.0 19.7 22.0 23.8
Queue time per unit 4.5 5.1 5.8 6.6
Inspection time per unit 0.8 1.0 1.0 0.8


Required:

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.

2. Evaluate the company’s performance over the last four months.

3-a. 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. 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.

Solutions

Expert Solution

1) a)
Month 1 2 3 4
Throughput time in days:
Process time 3.8 3.6 3.4 3.2
Inspection time 0.8 1 1 0.8
Move time 0.9 0.6 0.7 0.7
Queue time during production 4.5 5.1 5.8 6.6
Total throughput time 10 10.3 10.9 11.3
b)
Manufacturing cycle efficiency (MCE): Process time ÷ Throughput time
Process time 3.8 3.6 3.4 3.2
Total throughput time 10 10.3 10.9 11.3 days
MAnufacturing cycle efficiency (MCE): Process time ÷ Throughput time 38.0% 35.0% 31.2% 28.3%
c)
Delivery cycle time in days:
Wait time to start of production 18 19.7 22 23.8
Throughput time 10 10.3 10.9 11.3 days
Total delivery cycle time 28 30 32.9 35.1
Throughput time in days: Delivery cycle time in days: MAnufacturing cycle efficiency (MCE)
Month 1 10 Days 28 Days 38.0%
Month 2 10.3 Days 30 Days 35.0%
Month 3 10.9 Days 32.9 Days 31.2%
Month 4 11.3 Days 35.1 Days 28.3%
2)
Throughput time per unit Increasing Trends
Manufacturing cycle efficiency Declining Trends
Delivery cycle time Increasing Trends
3)
a.
Month 5th
Throughput time in days:
Process time 3.2
Inspection time 0.8
Move time 0.7
Queue time during production 0
Total throughput time 4.7 days
Manufacturing cycle efficiency (MCE): Process time ÷ Throughput time 68.09%
b)
Month 6 th
Throughput time in days:
Process time 3.2
Inspection time 0
Move time 0.7
Queue time during production 0
Total throughput time 3.9 days
Manufacturing cycle efficiency (MCE): Process time ÷ Throughput time 82.05%
Month 5 Month 6
Total throughput time 4.7 days 3.9 days
Manufacturing cycle efficiency (MCE): 68.09% 82.05%

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