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 0.3 days Wait time (from order to start of production) 14.0 days Process time 2.7 days Move time 1.0 days Queue time 5.0 days

Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter7: Inventory Cost Flow Assumptions (fifolifo)
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Problem 9R: Click the Chart sheet tab. On the screen is a column chart showing ending inventory costs. During a...
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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 0.3 days
Wait time (from order to start of production) 14.0 days
Process time 2.7 days
Move time 1.0 days
Queue time 5.0 days
 

 

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? 

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