Oakwood Company produces maple bookcases for customer orders It received an order from a customer...

Question:

Oakwood Company produces maple bookcases for customer orders It received an order from a customer to produce 5,000 bookcases. The following information is available for the production of the bookcases.

Process time15.0 days
Inspection time0.9 days
Move time5.2 days
Wait time15.0 days

Required:

1. Compute the company's manufacturing cycle time.

2. Compute the company's manufacturing cycle efficiency.

3. Oakwood believes it can reduce move time by 1.1 days and wait time by 2.5 days by adopting lean manufacturing techniques. Compute the company's manufacturing cycle efficiency assuming the company's predictions are correct.

Manufacturing Cycle Time:

Manufacturing cycle time is the total time taken to convert the raw material into finished goods. The formula to calculate manufacturing cycle time is:

Manufacturing cycle time = Process time + Inspection time + Move time + Wait time

Answer and Explanation: 1

1.

Manufacturing cycle time = Process time + Inspection time + Move time + Wait time

Manufacturing cycle time = 15 days + 0.9 days + 5.2 days + 15 days

Manufacturing cycle time = 36.1 days


2.

{eq}Manufacturing \ cycle \ efficiency \ = \ \dfrac{Process \ times}{Manufacturing \ cycle \ time} \\ Manufacturing \ cycle \ efficiency \ = \ \dfrac{15 \ days}{36.1 \ days} \\ Manufacturing \ cycle \ efficiency \ = \ 0.42 {/eq}


3.

Manufacturing cycle time = Process time + Inspection time + Move time + Wait time

Manufacturing cycle time = 15 days + 0.9 days + (5.2 days - 1.1 days) + (15 days - 2.5 days)

Manufacturing cycle time = 15.9 days + 4.1 days + 12.5 days

Manufacturing cycle time = 32.5 days


{eq}Manufacturing \ cycle \ efficiency \ = \ \dfrac{Process \ times}{Manufacturing \ cycle \ time} \\ Manufacturing \ cycle \ efficiency \ = \ \dfrac{15 \ days}{32.5 \ days} \\ Manufacturing \ cycle \ efficiency \ = \ 0.46 {/eq}


Learn more about this topic:

Loading...
Operating Cycle & Cash Cycle: Definition & Calculations

from

Chapter 17 / Lesson 2
5.7K

The operating cycle and cash conversion cycle are both tools to evaluate the timeline of when a business will become profitable. Explore the calculations of each, and identify their importance to a business.


Related to this Question

Explore our homework questions and answers library