In: Accounting
Christmas Express makes wreaths in batch sizes of 15. The cutting & assembly process takes 2 minutes per wreath and the decorating process time is 15 minutes per wreath. It takes 5 minutes to move the wreaths from the cutting & assembly process to the decorating process.
Compute the value-added, non-value-added, and the total lead time of the wreath process.
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Value-added lead time: |
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Non-value-added lead time: |
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Move time |
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Within batch wait time |
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Total lead time |
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Compute the value-added ratio. Round to one decimal place.
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| Value-added lead time [2 + 15] | 17 |
| Non-value-added lead time | |
| Move time | 5 |
| Within batch wait time [17 x (15 wreaths - 1 wreath)] | 238 |
| Total lead time | 260 |
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| Calculation of value-added ratio | |
| Value added lead time (a) | 17 |
| Total lead time (b) | 260 |
| value-added ratio [(a ÷ b) x 100] | 6.5% |