Connect Access Card For Fundamental Accounting Principles
Connect Access Card For Fundamental Accounting Principles
24th Edition
ISBN: 9781260158526
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter D, Problem 8E
To determine

Manufacturing Cycle Time:

The time taken from ordering raw material inventory to putting it in manufacturing production process to producing the finished goods . this can be categorized into following components as below

  1. Process Time : The actual time taken in processes where the raw material is converted into finished goods . This is also called value added activity which can be reduced by using various techniques like kaizen which is continuous improvement technique
  2. Inspection Time : The time taken for inspection of quality of raw material , work in process at different process end and finished goods . This is part of non value added activity
  3. Move Time : The time taken for movement of raw material and work in process goods and people between different process . This is part of non value added activity
  4. Wait time : The time taken between getting the production order and ordering the raw material inventory and actual arrival at production floor and during the process . This is part of non value added activity

The formula to calculate manufacturing cycle time is given below

  Manufacturing Cycle time = (Process Time + Inspection Time + Move time + Wait Time)

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