Problem 11-14 Measures of Internal Business Process Performance[LO11-3]
DataSpan, Inc., automated its plant at the start of the currentyear and installed a flexible manufacturing system. The company isalso evaluating its suppliers and moving toward Lean Production.Many adjustment problems have been encountered, including problemsrelating to performance measurement. After much study, the companyhas decided to use the performance measures below, and it hasgathered data relating to these measures for the first four monthsof operations.
| Month |
| 1 | | 2 | | 3 | | 4 | |
| Throughput time (days) | ? | | ? | | ? | | ? | |
| Delivery cycle time (days) | ? | | ? | | ? | | ? | |
| Manufacturing cycle efficiency (MCE) | ? | | ? | | ? | | ? | |
| Percentage of on-time deliveries | 75 | % | 70 | % | 67 | % | 64 | % |
| Total sales (units) | 2770 | | 2651 | | 2515 | | 2420 | |
|
Management has asked for your help in computing throughput time,delivery cycle time, and MCE. The following average times have beenlogged over the last four months:
| Average per Month (in days) |
| 1 | 2 | 3 | 4 |
| Move time per unit | 0.8 | | 0.4 | | 0.5 | | 0.5 | |
| Process time per unit | 3.9 | | 3.7 | | 3.5 | | 3.3 | |
| Wait time per order before start of production | 16.0 | | 17.5 | | 21.0 | | 22.6 | |
| Queue time per unit | 5.0 | | 5.9 | | 6.9 | | 8.0 | |
| Inspection time per unit | 0.4 | | 0.6 | | 0.6 | | 0.4 | |
|
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 eachmonth.
2. Evaluate the company’s performance over the last fourmonths.
3-a. Refer to the move time, process time, and so forth, givenfor 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 theuse of Lean Production the company is able to completely eliminatethe queue time during production. Compute the new throughput timeand MCE.
3-b. Refer to the move time, process time, and so forth, givenfor 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 thecompany is able to completely eliminate both the queue time duringproduction and the inspection time. Compute the new throughput timeand MCE.
