Problem:
Maria Rocco is concerned about the quantity of goods being produced by the Latin American Division of Auto World. The following production data are available for April 2001:
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60,000
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Total good units completed
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47,500
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Total value-added hours of processing time
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15,000
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Total hours of division time
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56,000
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Determine each of the following for this division for April.
a. What is the manufacturing cycle efficiency?
b. What is the process productivity?
c. What is the process quality yield?
d. What is the total throughput per hour?
e. If only 22,500 of the units produced in April had been sold, would your answers to any of the above questions differ? If so, how? If not, why not? f. If Rocco can eliminate 20 percent of the non-value-added time, how would throughput per hour for these data differ?
g. If Rocco can increase quality output to a yield of 94 percent and eliminate 20 percent of the non-value-added time, how would throughput per hour for these data differ?
h. How would Rocco determine how the non-value-added time was being spent in the division? What suggestions do you have to decrease non-value added time and increase yield?