Question

Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported:

Inspection time	0.4	days
Wait time (from order to start of production)	16.4	days
Process time	3.1	days
Move time	0.7	days
Queue time	3.6	days

Required:
1.	Compute the throughput time. (Round your answer to 1 decimal place.)

      

2.	Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.)

      

3.	What percentage of the throughput time was spent in non–value-added activities? (Round your percentage answer to nearest whole percent.)

      

4.	Compute the delivery cycle time. (Round your intermediate calculations and final answer to 1 decimal place.)

      

5.	If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Do not round intermediate calculations. Round your percentage answer to nearest whole percent.)

     

Answer 1

Ans.1	Throughput time   =     Inspection time + Process time + Move time + Queue time
		0.4 + 3.1 + 0.7 + 3.6
		7.8 days
Ans.2	MCE              =           Value added time / Throughput time
		3.1 / 7.8 * 100
		40.00%
	The only value added time process in the cycle time example is the process time.
	So   Value-added time = Process time
Ans.3	60% is of the throughput time was spent in not value added time because the 40% is spent on Value added time.
	(100% - 40% = 60%)
Ans.4	Delivery cycle time     =     Wait time + Throughput time
		16.4 + 7.8
		24.2 days
Ans.5	New MCE       =    Value added time / (Throughput time - Queue time)
		3.1 / (7.8 - 3.6)*100
		74%