Calculate Lead Time

Orion Devices Inc. is considering a new just-in-time product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 70 units. The process time for each step is as follows:

Process Step 1	4	minutes
Process Step 2	7	minutes
Process Step 3	9	minutes
Process Step 4	5	minutes

The time required to move each batch between steps is 18 minutes. In addition, the time to move raw materials to Process Step 1 is also 18 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 18 minutes.

The new just-in-time layout will allow the company to reduce the batch sizes from 70 units to 4 units. The time required to move each batch between steps and the inventory locations will be reduced to 3 minutes. The processing time in each step will stay the same.

Determine the value-added, non-value-added, total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.

	Present Approach		Proposed Approach
Value-added time		min		min
Non-value-added time		min		min
Total lead time		min		min
Value-added ratio (as a percent)		%		%