Technologistic Enterprises is a highly automated manufacturing firm. The CFO has decided that traditional standards are inappropriate for performance measures in this automated environment. Labor is insignificant in terms of the total cost of production and tends to be fixed, material quality is considered more important than minimizing material cost, and customer satisfaction is the number one priority. As a result, production and delivery performance measures have been chosen to evaluate performance. The following information is considered typical of the time involved to complete and ship orders. Waiting time: From order being placed to start of production 8.0 days From start of production to completion 7.0 days Inspection time 1.5 days Processing time3.0 days Move time2.5
days Required:1. Calculate the manufacturing cycle efficiency. 2. Calculate the delivery cycle time.
What will be an ideal response?
| 1. | Manufacturing cycle efficiency (MCE) | = | Processing Time ÷ (Processing time + inspection time + waiting time + move time) (in days) |
| ? | ? | = | 3 ÷ (3 + 1.5 + 15 + 2.5) (in days) |
| ? | ? | = | 13.6% |
| ? | ? | ? | ? |
| 2. | Delivery cycle time is the average time between receipt of the customer's order until delivery of the goods. In this case the delivery cycle time is 22 days. |
Business
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