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Lead Time iSounds Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit ( ( P C ) ) board assembly, final
Lead Time iSounds Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit P C board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of printed circuit boards. Each board requires minutes of board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes minutes to complete. The final assembly for each stereo unit requires minutes and is also done in batches of units. A batch of stereos is moved into the test building, which is across the street. The move takes minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires minutes. The units wait while the setup is performed. In the final test, the unit batch is tested one at a time. Each test requires minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and labeling requires minutes per unit. Required: Determine the amount of valueadded and nonvalueadded lead time and the valueadded ratio in this process for an average stereo unit in a batch of units. Categorize the nonvalueadded time into wait and move time. Round the percentage to one decimal place. Move time in this process could best be reduced by: a Doing nothing. b Changing the layout from a process orientation to a product orientation. c Increasing batch sizes. d Eliminating the testing step. e Hiring more workers.
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