Managing activities across the value chain represents a comprehensive integrated approach to the traditional management functions of planning and control. Eliminating non-value-added activities from the chain is central to this strategic approach to cost management.

Smith Corporation is considering the implementation of a JIT inventory system. The company recently analyzed its cycle time to determine the average number of days spent in each activity of its production process. Use the summary of the analysis shown below to answer the included questions in a response of2-3 pages:

Production Activity Number of Days

Receiving materials 1

Inspecting materials 4

Storing materials 9

Moving Materials into production6

Setting-up production equipment 7

Cutting Materials 6

Assembling materials 7

Painting finished product 4

Packaging finished products 1

A.What steps are needed to determine the value-adding production activities?

B.What is the total cycle time in days?

C.What is the manufacturing efficiency ratio_______%?

D.Discuss the activities that might be reduced or eliminated to implement an efficient JIT system?