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Chapter 27 - Ethics in Action DB #14 In August, Lannister Company introduced a new performance measurement system in manufacturing operations. One of the new

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Chapter 27 - Ethics in Action DB #14 In August, Lannister Company introduced a new performance measurement system in manufacturing operations. One of the new performance measures is lead time, which is determined by tagging a random sample of items with a log sheet throughout the month. The log sheets recorded the time that the sample items started production and the time that they ended production, as well as all of the steps in between. At the end of each month, the controller collected the log sheets and calculated the average lead time of the tagged products. This number was reported to central management and was used to evaluate the performance of the plant manager. Because of the poor lead time results reported for August, the plant was under extreme pressure to reduce lead time in September The following memo was intercepted by the controller Date: September 3 To: Hourly Employees From: Plant Manager During last month, you may have noticed that some of the products were tagged with a log sheet. This sheet records the time that a product enters production and the time that it leaves production. The difference between these two times is termed lead time. Our plant is evaluated on improving lead time. From now on, I ask you to keep an eye out for the tagged item. When you see a tagged itemit is to receive special attention. Work on that item first and then immediately move it to the next operation. Under no circumstances should tagged items wait on any other work that you have Naturally, report accurate information is that you record the correct times on the log sheet as the product goes through your department How should the controller respond to this discovery

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