Chapter 11, Problem 11.19P

1.

To determine

Compute the performance measures of throughput time, MCE, and delivery cycle time.

Introduction: Return on investments is difference between cost of investment and net profit. It is also performance measure which evaluates the efficiency of the investment made. It is even used in comparing the efficiency of difference between investments.

Answer to Problem 11.19P

The performance measures for 1 month in throughput time is 6 days, MCE is 35%, and delivery cycle time is 15 days, 2 month in throughput time is 7.5 days, MCE is 26%, and delivery cycle time is 19 days, 3 month in throughput time is 9 days, MCE is 21.1%, and delivery cycle time is 21 days, and 4 month in throughput time is 10 days, MCE is 18%, and delivery cycle time is 24 days.

Explanation of Solution

For 1 monthThroughput time

  $\begin{array}{l}Throughputtime=\left(\begin{array}{l}\mathrm{Pr}ocesstime+Inspectiontime+\\ Movetime+Queuetime\end{array}\right)\\ Throughputtime=\text{ 2}\text{.1}+0.8+0.3+2.8\\ Throughputtime=6days\end{array}$

Manufacturing Cycle Efficiency (MCE)

  $\begin{array}{l}Manufacturingcycleefficiency(MCE)=\frac{Valueaddedtime}{Throughputtime}\times 100\\ Manufacturingcycleefficiency(MCE)=\frac{2.1}{6}\times 100\\ Manufacturingcycleefficiency(MCE)=\text{ 3}5\%\end{array}$

Delivery cycle time

  $\begin{array}{l}Deliverycycletime=Waittime+Throughputtime\\ Deliverycycletime=\text{ 9}+6\\ Deliverycycletime=\text{ 15 }days\end{array}$

For 2 monthThroughput time

  $\begin{array}{l}Throughputtime=\left(\begin{array}{l}\mathrm{Pr}ocesstime+Inspectiontime+\\ Movetime+Queuetime\end{array}\right)\\ Throughputtime=\text{ 2}\text{.0}+0.7+0.4+4.4\\ Throughputtime=7.5days\end{array}$

Manufacturing Cycle Efficiency (MCE)

  $\begin{array}{l}Manufacturingcycleefficiency(MCE)=\frac{Valueaddedtime}{Throughputtime}\times 100\\ Manufacturingcycleefficiency(MCE)=\frac{2.0}{7.5}\times 100\\ Manufacturingcycleefficiency(MCE)=\text{ 2}6\%\end{array}$

Delivery cycle time

  $\begin{array}{l}Deliverycycletime=Waittime+Throughputtime\\ Deliverycycletime=11.5+7.5\\ Deliverycycletime=\text{ 19 }days\end{array}$

For 3 monthThroughput time

  $\begin{array}{l}Throughputtime=\left(\begin{array}{l}\mathrm{Pr}ocesstime+Inspectiontime+\\ Movetime+Queuetime\end{array}\right)\\ Throughputtime=\text{ 1}\text{.9}+0.7+0.4+6.0\\ Throughputtime=9days\end{array}$

Manufacturing Cycle Efficiency (MCE)

  $\begin{array}{l}Manufacturingcycleefficiency(MCE)=\frac{Valueaddedtime}{Throughputtime}\times 100\\ Manufacturingcycleefficiency(MCE)=\frac{1.9}{9}\times 100\\ Manufacturingcycleefficiency(MCE)=21.1\%\end{array}$

Delivery cycle time

  $\begin{array}{l}Deliverycycletime=Waittime+Throughputtime\\ Deliverycycletime=\text{ 12}+9\\ Deliverycycletime=\text{ 21 }days\end{array}$

For 4 monthThroughput time

  $\begin{array}{l}Throughputtime=\left(\begin{array}{l}\mathrm{Pr}ocesstime+Inspectiontime+\\ Movetime+Queuetime\end{array}\right)\\ Throughputtime=\text{ 1}\text{.8}+0.7+0.5+7.0\\ Throughputtime=10days\end{array}$

Manufacturing Cycle Efficiency (MCE)

  $\begin{array}{l}Manufacturingcycleefficiency(MCE)=\frac{Valueaddedtime}{Throughputtime}\times 100\\ Manufacturingcycleefficiency(MCE)=\frac{1.8}{10}\times 100\\ Manufacturingcycleefficiency(MCE)=18\%\end{array}$

Delivery cycle time

  $\begin{array}{l}Deliverycycletime=Waittime+Throughputtime\\ Deliverycycletime=\text{ 14}+10\\ Deliverycycletime=\text{ 24 }days\end{array}$

2.

To determine

Identifying where company seems to be improving and deteriorating.

Introduction: Return on investments is difference between cost of investment and net profit. It is also performance measure which evaluates the efficiency of the investment made. It is even used in comparing the efficiency of difference between investments.

Answer to Problem 11.19P

Company seems to be improving with quality control, material control, and delivery performance .Deteriorating points are with decrease in machine and delivery performance, material control.

Explanation of Solution

Company can be improved in following areas:

1. Quality control: Defects has decreased by 50% in the last four months. Overall the quality has been significantly improved.
2. Material control: Lead time purchase is same as it was four month ago, this happens due to the purchase that arrives in less time. It may be the effect of company that is moving towards just in time of JIT purchasing.
3. Delivery performance: Process time is decreased from 2.1 days to 1.8 days within last four months.

Company has deteriorated in following areas:

1. Material control: Scrap is increased by triple rate from last four rates.
2. Machine performance: Machine performance is decreased that it has broke down two times in last four months. Reasons may be greater setup time or new equipment is not operated properly.
3. Delivery performance: It is been moving in wrong direction Throughput time and delivery cycle time is been increased and manufacturing cycle efficiency is been decreased.

3.

To determine

With inspection time and process time find out throughput time and MCE by assuming 5 month and 6 month instead of 4 month.

Introduction: Return on investments is difference between cost of investment and net profit. It is also performance measure which evaluates the efficiency of the investment made. It is even used in comparing the efficiency of difference between investments.

Answer to Problem 11.19P

The performance measures for 5 month in throughput time is 3 days and MCE is 60%, 6 month in throughput time is 2.3 days and MCE is 78.3%.

Explanation of Solution

1. Computation of new throughput time and MCE with the month of 5 month.

Throughput time

  $\begin{array}{l}Throughputtime=\left(\begin{array}{l}\mathrm{Pr}ocesstime+Inspectiontime+\\ Movetime\end{array}\right)\\ Throughputtime=\text{ 1}\text{.8+0}\text{.7+0}\text{.5}\\ Throughputtime=3days\end{array}$

Manufacturing Cycle Efficiency (MCE)

  $\begin{array}{l}Manufacturingcycleefficiency(MCE)=\frac{\text{Process }time}{Throughputtime}\times 100\\ Manufacturingcycleefficiency(MCE)=\frac{1.8}{3}\times 100\\ Manufacturingcycleefficiency(MCE)=\text{ 60 \%}\end{array}$

2. Computation of new throughput time and MCE with the month of 6 month.

Throughput time

  $\begin{array}{l}Throughputtime=\left(\mathrm{Pr}ocesstime+Movetime\right)\\ Throughputtime=\text{ 1}\text{.8+5}\\ Throughputtime=2.3days\end{array}$

Manufacturing Cycle Efficiency (MCE)

  $\begin{array}{l}Manufacturingcycleefficiency(MCE)=\frac{\text{Process }time}{Throughputtime}\times 100\\ Manufacturingcycleefficiency(MCE)=\frac{1.8}{2.3}\times 100\\ Manufacturingcycleefficiency(MCE)=\text{ 78}\text{.3\%}\end{array}$