Lead Time iSounds Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 20 printed circuit boards. Each board requires 5 minutes board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 10 minutes to complete. The final assembly for each stereo unit requires 16 minutes and is also done in batches of 20 units. A batch of 20 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 25 minutes. The units wait while the setup is performed. In the final test, the 20-unit batch is tested one at a time. Each test requires 8 minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of 20 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and labeling requires 10 minutes per unit. Required: 1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 20 units. Round percentages to one decimal place. Categorize the non-value-added time into wait and move time. Value-added lead time Non-value-added lead time: Wait time lead time Move time lead time Total non-value-added lead time Total lead time Value added ratio (ar a porrent) min. min. 39 ✓ min. min. 1,810 x min.
Lead Time iSounds Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 20 printed circuit boards. Each board requires 5 minutes board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 10 minutes to complete. The final assembly for each stereo unit requires 16 minutes and is also done in batches of 20 units. A batch of 20 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 25 minutes. The units wait while the setup is performed. In the final test, the 20-unit batch is tested one at a time. Each test requires 8 minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of 20 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and labeling requires 10 minutes per unit. Required: 1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 20 units. Round percentages to one decimal place. Categorize the non-value-added time into wait and move time. Value-added lead time Non-value-added lead time: Wait time lead time Move time lead time Total non-value-added lead time Total lead time Value added ratio (ar a porrent) min. min. 39 ✓ min. min. 1,810 x min.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Lead Time
iSounds Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling
electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 20 printed circuit boards. Each board requires 5 minutes of board assembly time.
After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 10 minutes to complete.
The final assembly for each stereo unit requires 16 minutes and is also done in batches of 20 units. A batch of 20 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment
must be set up for the particular stereo model. The test setup requires 25 minutes. The units wait while the setup is performed. In the final test, the 20-unit batch is tested one at a time. Each test requires 8 minutes. The completed batch, after all testing, is
sent to shipping for packaging and final shipment to customers. A complete batch of 20 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and
labeling requires 10 minutes per unit.
Required:
1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 20 units. Round percentages to one decimal place. Categorize the non-value-added time into wait
and move time.
Value-added lead time
Non-value-added lead time:
Wait time lead time.
Move time lead time
Total non-value-added lead time
Total lead time
Value-added ratio (as a percent)
min.
min.
39 ✓ min.
1,810
min.
x min.
2.2 X %
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