Exercise 12-3 (Algo) Measures of Internal Business Process Performance [LO12-3] Management of Mittel Company 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 to start of production) Process time Move time Queue time Required: 0.4 days 15.5 days 3.3 days 0.7 days 3.9 days 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 1 decimal place.) Answer is complete but not entirely correct. 1. Throughput time 23.8 days 3. Non-value-added throughput time 2. Manufacturing cycle efficiency 4. Delivery cycle time 5. New manufacturing cycle efficiency 17% 83% 25.8 days 28.8 %

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter12: Activity-based Management
Section: Chapter Questions
Problem 15E: Refer to Exercise 12.14. Suppose that for 20x2, Sanford, Inc., has chosen suppliers that provide...
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Exercise 12-3 (Algo) Measures of Internal Business Process Performance [LO12-3]
Management of Mittel Company 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 to start of production)
Process time
Move time
Queue time
Required:
0.4 days
15.5 days
3.3 days
0.7 days
3.9 days
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 1 decimal place.)
Answer is complete but not entirely correct.
1. Throughput time
23.8 days
3. Non-value-added throughput time
2. Manufacturing cycle efficiency
4. Delivery cycle time
5. New manufacturing cycle efficiency
17%
83%
25.8 days
28.8
%
Transcribed Image Text:Exercise 12-3 (Algo) Measures of Internal Business Process Performance [LO12-3] Management of Mittel Company 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 to start of production) Process time Move time Queue time Required: 0.4 days 15.5 days 3.3 days 0.7 days 3.9 days 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 1 decimal place.) Answer is complete but not entirely correct. 1. Throughput time 23.8 days 3. Non-value-added throughput time 2. Manufacturing cycle efficiency 4. Delivery cycle time 5. New manufacturing cycle efficiency 17% 83% 25.8 days 28.8 %
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