Question

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations. Month 2 Throughput time (days) Delivery cycle time (days) Manufacturing cycle efficiency (MCE) Percentage of on-time deliveries 743 Total sales (units) 2 ? ? ? ? 2 3 ? ? ? 71% 3433 4 2 ? ? 3780 3618 3304 Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months: Move time per unit Process time per unit Wait time per order before start of production Queue time per unit Inspection time per unit Average per Month (in days) 1 2 3 4 0.7 0.5 0.6 0.6 2.3 2.2 2.1 2.0 25.0 27.4 30.0 32.4 5.6 7.3 0.5 0.5 0.4 Required: 1-a. Compute the throughput time for each month. 1-b. Compute the delivery cycle time for each month. 1-c. Compute the manufacturing cycle efficiency (MCE) for each month. 2. Evaluate the company's performance over the last four months. 3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE. 3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

*************************************PLEASE SHOW CALCULATIONS************************

Answer 1

1.)

	Throughtput time	Delivery cycle time	Manufacturing cycle efficiency (MCE)
Month 1	8.3 days	33.3 days	27.7%
Month 2	8.8 days	36.2 days	25.0%
Month 3	9.6 days	39.6 days	21.9%
Month 4	10.3 days	42.7 days	19.4%

CALCULATIONS:

1-a.) Throughput time = Process time + Inspection time + Move time + Queue time

Month 1	(2.3 + 0.4 + 0.7 + 4.9) days	8.3 days
Month 2	(2.2 + 0.5 + 0.5 + 5.6) days	8.8 days
Month 3	(2.1 + 0.5 + 0.6 + 6.4) days	9.6 days
Month 4	(2.0 + 0.4 + 0.6 + 7.3) days	10.3 days

1-b.) Delivery cycle time = Wait time + Throughput time

Month 1	(25.0 + 8.3) days	33.3 days
Month 2	(27.4 + 8.8) days	36.2 days
Month 3	(30.0 + 9.6) days	39.6 days
Month 4	(32.4 + 10.3) days	42.7 days

1-c.) Manufacturing Cycle Efficiency = $\tfrac{Process Time}{Throughput Time}*100$

Month 1	(2.3/8.3)*100	27.7%
Month 2	(2.2/8.8)*100	25.0%
Month 3	(2.1/9.6)*100	21.9%
Month 4	(2.0/10.3)*100	19.4%

2.) Evaluation of company's performance for the last 4 months

The Throughput Time measure displays	Unfavorable	Trend
The Delivery Cycle time-days measure displays	Unfavorable	Trend
Manufacturing Cycle Effiiciency - days measure displays	Unfavorable	Trend

Evaluation is MCE is decreasing every month and throughtput time and delivery cycle time is increasing every month.

3.)

	Month 5	Month 6
Throughput Time	3.0 days	2.6 days
Manufacturing Cycle Effiiciency	66.7%	76.9%

CALCULATIONS:

3-a.) New throughput time for month 5 = Process time + Inspection time + Move time

= (2.0 + 0.4 + 0.6) days

=3 days

New MCE for month 5 = $\tfrac{Process Time}{Throughput Time}*100$

= (20 / 3) days* 100

= 66.7%

3-b.)

New throughput time for month 6 = Process time + Move time

= (2.0 + 0.6) days

= 2.6 days

New MCE for month 6 = $\tfrac{Process Time}{Throughput Time}*100$

= (2.0 / 2.6)days* 100

= 76.9%

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