Question

Calculate the Value-Added Ratio for the following production of Hammer Pants Hammers: Raw materials pulled from stock 3.82 hours Materials sent to proper department 4.60 hours Formation of raw metal into Hammer 2.78 hours Moving to assembly - Metal piece 3.43 hours Hard plastic formation of custom parachute pants 2.67 hours Painting and finishing of plastic parts 3.41 hours Moving to assembly - plastic parts 2.32 hours Holding bin waiting for assembly 5.62 hours Assembly - attaching parts together 2.87 hours Complete waiting for polish/finishing 4.14 hours Polishing/cleaning/Finishing 3.03 hours Moving to packing 1.45 hours Packing 3.06 hours Attach work on last question This question is worth 9 total points

Answer 1

Value added ratio = time spent adding value to a product or service/total time spent from receipt of order to it's delivery

In the given case,

Time spent adding value to product = 21.64 hours (see note 1)

Total time spent = 43.2 hours (see note 1)

Value added ratio = 21.64/43.2 = 0.5009 or 50.09%

Note :-

1 Statement showing time spent from order to delivery and to add value to product is as follows :-

Particulars	Time spent adding value	total time spent
RM pulled from stock	3.82	3.82
Material sent to proper department		4.6
Formation of raw material into hammer	2.78	2.78
Moving to assembly		3.43
Formation of custom parachute pants	2.67	2.67
Painting & finishing of plastics parts	3.41	3.41
Moving to assembly plastic parts		2.32
Waiting for assembly		5.62
Attaching parts together	2.87	2.87
Waiting for polish		4.14
Polishing	3.03	3.03
Moving to packing		1.45
Packing	3.06	3.06
	21.64 hours	43.2 hours