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	82	%	77	%	74	%	71	%
Total sales (units)	3830		3667		3479		3347

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	0.8		0.5		0.6		0.6
Process time per unit	2.3		2.2		2.1		2.0
Wait time per order before start of production	24.0		26.3		29.0		31.4
Queue time per unit	4.4		5.0		5.7		6.5
Inspection time per unit	0.9		1.1		1.1		0.9

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.

Answer 1

	Month
	1	2	3	4
Thourghput time (days)	8.4	8.8	9.5	10
Delivery Cycle Time (Days)	32.4	35.1	38.5	41.4
Manufacturing Cycle Efficiency	27%	25%	22%	20%
Percentage of on-time deliveries	82%	77%	74%	71%
Total Sales (Units)	3830	3667	3479	3347
Working:
		Average per Month (in days)
		1	2	3	4
Move time per unit	A	0.8	0.5	0.6	0.6
Process time per unit	B	2.3	2.2	2.1	2
Wait time per order before start of production	C	24	26.3	29	31.4
Queue time per unit	D	4.4	5	5.7	6.5
Inspection time per unit	E	0.9	1.1	1.1	0.9
Throughput Time (A+B+D+E) per unit	F	8.4	8.8	9.5	10
Delivery cycle Time per unit (F + C)	G	32.4	35.1	38.5	41.4
Manufacturing Cycle Efficiency (B / F)	H	27%	25%	22%	20%

2. going through teh ratios calculated, it can be said that in all the parameters the company is not performing well and the performance is deteriorating over the four month period.

a. The thoruhgput time has increased from 8.4 to 10 days.

b. The delivery cycle time has increased from 32.4 dayd to 41.4 days.

c. The manufacturing cycle efficiency has come dwon from 27% to 20%.

d. The percentage of on-time deliveries has come down from 82% to 71%.

e. Total sales has also come down from 3,830 units to 3,347 units.

3-a.

		Month
		5
Move time per unit	A	0.6
Process time per unit	B	2
Wait time per order before start of production	C	31.4
Queue time per unit	D	0
Inspection time per unit	E	0.9
Throughput Time (A+B+D+E) per unit	F	3.5
Delivery cycle Time per unit (F + C)	G	34.9
Manufacturing Cycle Efficiency (B / F)	H	57%

3-b.

		Month
		6
Move time per unit	A	0.6
Process time per unit	B	2
Wait time per order before start of production	C	31.4
Queue time per unit	D	0
Inspection time per unit	E	0
Throughput Time (A+B+D+E) per unit	F	2.6
Delivery cycle Time per unit (F + C)	G	34
Manufacturing Cycle Efficiency (B / F)	H	77%