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The XYZ Company produces small plastic toys in its Burbuli manufacturing plant. The company is currently evaluating ways to improve productivity. The accountant of the firm's parent organization suggested that management implement a new compensation plan based on throughput performance measure as an incentive to increase productivity. To demonstrate how such a measure might work, the accountant gathered the following production data for a recent month: Total units attempted 6,000,000 Good units manufactured 4,800,000 Processing time (total hours) 800 Value-added processing time 600 1. Compute the theoretical velocity. 2. Compute the actual cycle time.

The XYZ Company produces small plastic toys in its Burbuli manufacturing plant. The company is currently evaluating ways to improve productivity. The accountant of the firm's parent organization suggested that management implement a new compensation plan based on throughput performance measure as an incentive to increase productivity. To demonstrate how such a measure might work, the accountant gathered the following production data for a recent month: Total units attempted 6,000,000 Good units manufactured 4,800,000 Processing time (total hours) 800 Value-added processing time 600 1. Compute the theoretical velocity. 2. Compute the actual cycle time.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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The XYZ Company produces small plastic toys in its Burbuli manufacturing plant. The company is currently evaluating ways to improve productivity. The accountant of the firm's parent organization suggested that management implement a new compensation plan based on throughput performance measure as an incentive to increase productivity. To demonstrate how such a measure might work, the accountant gathered the following production data for a recent month:

Total units attempted 6,000,000

Good units manufactured 4,800,000

Processing time (total hours) 800

Value-added processing time 600

1. Compute the theoretical velocity.

2. Compute the actual cycle time.

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