Exercise 10.3 Measures of Internal Business Process Performance - Mittel Rhein AG of Köln, Germany

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

Requirement 1:

Compute the throughput time.

Throughput time

days

Requirement 2:

Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your answer to 2 decimal places.)

Manufacturing cycle efficiency

Requirement 3:

What percentage of the throughput time was spent in non-value-added activities? (Omit the "%" sign in your response.)

Throughput time

%

Requirement 4:

Compute the delivery cycle time.

Delivery cycle time

days

Requirement 5:

If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your answer to 3 decimal places.)

Manufacturing cycle efficiency