The IVplast Corporation uses an injection molding machine to make a plastic product, Z39, after receiving firm
Question:
The IVplast Corporation uses an injection molding machine to make a plastic product, Z39, after receiving firm orders from its customers. IVplast estimates that it will receive 40 orders for Z39 during the coming year. Each order of Z39 will take 120 hours of machine time.
The annual machine capacity is 6,800 hours.
Required
1. Calculate
(a) The average amount of time that an order for Z39 will wait in line before it is processed and
(b) The average manufacturing cycle time per order for Z39.
2. IVplast is considering introducing a new product, Y28. The company expects it will receive 20 orders of Y28 in the coming year. Each order of Y28 will take 50 hours of machine time. Assuming the demand for Z39 will not be affected by the introduction of Y28, calculate
(a) The average waiting time for an order received and
(b) The average manufacturing cycle time per order for each product, if IVplast introduces Y28.
Step by Step Answer:
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 9780135628478
17th Edition
Authors: Srikant M. Datar, Madhav V. Rajan