**Title: Reducing Order Processing Time for Mitel Company**Mitel Company aims to minimize the gap between customer order placement and shipment. Below is the recorded data for the first quarter of the current year's operations:- **Inspection time:** 0.3 days- **Wait time (from order to start of production):** 16.7 days- **Process time:** 3.1 days- **Move time:** 0.9 days- **Queue time:** 4.2 days**Requirements:**1. **Compute the throughput time.** *(Round your answer to 1 decimal place.)*2. **Calculate the manufacturing cycle efficiency (MCE) for the quarter.** *(Round your percentage answer to the nearest whole percent.)*3. **Determine the percentage of throughput time spent on non−value−added activities.** *(Round your percentage answer to the nearest whole percent.)*4. **Compute the delivery cycle time.** *(Round your intermediate calculations and final answer to 1 decimal place.)*5. **Using Lean Production, estimate the new MCE when all queue time during production is eliminated.** *(Do not round intermediate calculations. Round your percentage answer to 1 decimal place.)***Table Overview:**This section should have a table for the computed values, which may include:- **Throughput time:** ___ days- **Manufacturing cycle efficiency:** ___ %- **Non-value-added throughput time:** ___ %- **Delivery cycle time:** ___ days- **New manufacturing cycle efficiency:** ___ %This analysis will guide process improvement initiatives to ensure Mitel Company enhances its order-to-shipment efficiency.

Throughput Time = Process time + Inspection Time + Move Time + Queue TimeValue Added Time = Process Time1. Throughput Time = Process time + Inspection Time + Move Time + Queue Time = 3.1 days + 0.3 days + 0.9 days + 4.2 days = 8.5 days 2. Value Added Time = Process Time = 3.1 days MCE = Value Added Time / Throughput Time = 3.1 days / 8.5 = 36% 3. Percentage of the throughput time was spent in non–value-added activities = 100 - 36 = 64% 4. Delivery Cycle time = wait Time + Throughput Time = 16.7 days + 8.5 days = 25.2 days 5. New Throughput Time = Process time + Inspection Time + Move Time = 3.1 days + 0.3 days + 0.9 days = 4.30 days New MCE = Value Added Time / New Throughput Time = 3.1 days / 4.3 days = 72%

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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) 0.3 days 16.7 days 3.1 days 0.9 days 4.2 days Process time Move time Queue time Required: 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.) 1. Throughput time 2. Manufacturing cycle efficiency 3. Non-value-added throughput time 4. Delivery cycle time 5. New manufacturing cycle efficiency days % % days %

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) 0.3 days 16.7 days 3.1 days 0.9 days 4.2 days Process time Move time Queue time Required: 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.) 1. Throughput time 2. Manufacturing cycle efficiency 3. Non-value-added throughput time 4. Delivery cycle time 5. New manufacturing cycle efficiency days % % days %

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 57P: Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account...

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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 16.2 days 3.4 days 1.3 days 3.7 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…
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Measures of Internal Business Process Performance 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: Required: 1. Compute the throughput time. 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. 3. What percentage of the throughput time was spent in non-value-added activities? 4. Compute the delivery cycle time. 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE?
DGT Corporation's management keeps track of the time it takes to process orders. During themost recent month, the following average times (days) were recorded per order: Wait time 13.9Inspection time 0.4Process time 3.2Move time 0.7Queue time 2.8 Required:a. Compute the throughput time. b. Compute the manufacturing cycle efficiency (MCE).c. What percentage of the production time is spent in non-value-added activities? d. Compute the delivery cycle time.
Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Additional data concerning the usage of the activities by the various customers are also provided: Required: (Note: Round answers to two decimal places.) 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? 2. Calculate a cost per account by customer category by using activity rates. 3. Currently, the bank offers free checking to all of its customers. The interest revenues average 90 per account; however, the interest revenues earned per account by category are 80, 100, and 165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Then calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. 4. CONCEPTUAL CONNECTION After the analysis in Requirement 3, a vice president recommended eliminating the free checking feature for low-balance customers. The bank president expressed reluctance to do so, arguing that the low-balance customers more than made up for the loss through cross-sales. He presented a survey that showed that 50% of the customers would switch banks if a checking fee were imposed. Explain how you could verify the presidents argument by using ABC.
Schlarbaum Corporation's management keeps track of the time it takes to process orders. During the most recent month, the following average times were recorded per order: Days Wait time 13.2 Inspection time 0.7 Process time 1.6 Move time 0.6 Queue time 2.2 Required: a. Compute the throughput time. (Round your answer to 1 decimal places.) b. Compute the manufacturing cycle efficiency (MCE). (Do not round intermediate calculations. Round your answer to nearest whole percentage.) c. What percentage of the production time is spent in non-value-added activities? (Do not round intermediate calculations. Round your answer to nearest whole percentage.) d. Compute the delivery cycle time. (Round your answer to 1 decimal place.)
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