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Orion Devices Inc. is considering a new just-in-time product cell. The present manufacturing approach produces...

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Accounting

Orion Devices Inc. is considering a new just-in-time product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 60 units. The process time for each step is as follows:

Process Step 1 9 minutes
Process Step 2 8 minutes
Process Step 3 5 minutes
Process Step 4 4 minutes

The time required to move each batch between steps is 16 minutes. In addition, the time to move raw materials to Process Step 1 is also 16 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 16 minutes.

The new just-in-time layout will allow the company to reduce the batch sizes from 60 units to 4 units. The time required to move each batch between steps and the inventory locations will be reduced to 3 minutes. The processing time in each step will stay the same.

Determine the value-added, non-value-added, total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.

Present Approach Proposed Approach
Value-added time min min
Non-value-added time min min
Total lead time min min
Value-added ratio (as a percent) % %

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