Homework SourseExercise 123 Measures of Internal Business Process Performan
Exercise 12-3 Measures of Internal Business Process Performance [LO12-3 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 Wait time (from order tostart of production) Process time Move time Queue time 0.3 day 14.0 days 2.7 days 1.00 day 5.0 days Required: 1. Compute the throughput time hroughput time days 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.) Manufacturing cycle efficiency
Solution
(1)
Process Time
2.7 days
Inspection Time
0.3 days
Move Time
1 day
Queue Time
5 days
Throughput Time
9 days
(2) MCE = value added time/Throughput Time
Value added Time = Process Time = 2.7 days
MCE = 2.7/9 = 30%
(3) Non value added time in Throughput = Throughput time – Process Time
= 9 – 2.7 = 6.3 days
= 6.3/9 = 70%
(4)
Wait Time
14 days
Process Time
2.7 days
Inspection Time
0.3 days
Move Time
1 day
Queue Time
5 days
Throughput Time
23 days
(5) MCE = value added time/Throughput Time
Value added Time = Process Time = 2.7 days
New Throughput Time = 9 – 5 = 4 days
2.7/4 = 67.5%
| Process Time | 2.7 days |
| Inspection Time | 0.3 days |
| Move Time | 1 day |
| Queue Time | 5 days |
| Throughput Time | 9 days |
