Questions:
MCE, EXPRESSION OF A TESTABLE STRATEGY, DOUBLE-LOOP FEEDBACK
A manufacturing plant has the theoretical capability to produce 54,000 printers per quarter but currently produces 20,250 units. The conversion cost per quarter is $2,430,000. There are 13,500 production hours available within the plant per quarter. In addition to the processing minutes per unit used, the production of printers uses nine minutes of move time, six minutes of wait time, and 10 minutes of rework time. (All work is done by cell workers.). Assume that the company identifies poor plant layout as the root cause of Required:
1. Express an improvement strategy as a series of if-then statements that will reduce the conversion cost per printer.
2. Assume that you set an MCE target of 60 percent, based on the improvement strategy described in Requirement 1. What is the expected conversion cost per unit? Explain how you can use these targets to test the viability of your quality improvement strategy. wait time and move time.