ABC Mfg. is evaluating the desirability of implementing process improvements and is seeking your help to analyze whether the company should proceed with the proposed improvements. One area of focus is how the improvements will affect processing time (cycle time efficiency). Estimated activities and associated times for these activities under both the current process and after process improvements are given below.

Data Input

Required
1. Determine the production (manufacturing) lead time for each of the two decision alternatives.
2. Determine the processing cycle efficiency (PCE) for each decision alternative.
3. Based only on the PCE figures calculated above in (2), should the company implement the proposed process improvements? Why or why not?
4. Why would process improvements, such as those referenced above, likely lead to improved financial performance?

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After Process Improvements Process Activity Wait (setup) time (hours) Inspection (minutes) Moving (minutes) Processing (manufacturing) (hours) Current Process 4 40 80 20 1.25 # of minutes/hour 60