Problem 9-14A Measures of Internal Business Process Performance [LO9-3]

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

	Month
	1	2	3	4
Throughput time (days)	?	?	?	?
Delivery cycle time (days)	?	?	?	?
Manufacturing cycle efficiency (MCE)	?	?	?	?
Percentage of on-time deliveries	77%	78%	83%	90%
Total sales (units)	10,550	10,560	10,510	10,500

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

	Average per Month (in days)
	1		2		3		4
Move time per unit	0.8		0.5		0.4		0.5
Process time per unit	0.3		0.5		0.5		0.4
Wait time per order before start of production	9.2		9.0		5.0		4.0
Queue time per unit	3.6		3.9		2.3		1.1
Inspection time per unit	0.7		0.6		0.5		0.5

Required:
1-a.	Compute the throughput time for each month. (Round your answers to 1 decimal place.)

	Throughput Time
Month 1		days
Month 2		days
Month 3		days
Month 4		days

1-b.

Compute the manufacturing cycle efficiency (MCE) for each month. (Round your answers to 1 decimal place (i.e., 0.123 should be entered as 12.3).)

	Manufacturing Cycle Efficiency (MCE)
Month 1		%
Month 2		%
Month 3		%
Month 4		%

1-c.

Compute the delivery cycle time for each month. (Round your answers to 1 decimal place.)

	Delivery Cycle Time
Month 1		days
Month 2		days
Month 3		days
Month 4		days

3-a.

Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE. (Round your Throughput Time to 1 decimal place. Round your MCE percentage answer to 1 decimal place (i.e., 0.123 should be entered as 12.3).)

	Month 5
Throughput Time		Days
Manufacturing Cycle Efficiency (MCE)		%

3-b.

Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE. (Round your Throughput Time to 1 decimal place. Round your MCE percentage answer to 1 decimal place (i.e., 0.123 should be entered as 12.3).)

	Month 6
Throughput Time		Days
Manufacturing Cycle Efficiency (MCE)		%

Problem 9-17A Comparison of Performance Using Return on Investment (ROI) [LO9-1]

Comparative data on three companies in the same service industry are given below.

Required:
2.	Fill in the missing information.(Round your Turnover answers to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

	Companies in the Same Industry
	A		B		C
Sales	$4,142,000		$2,520,000
Net Operating Income	$745,560		$478,800
Average Operating Assets	$2,180,000				$2,580,000
Margin		%		%	7.00	%
Turnover			2.30
Return on Investment (ROI)		%	15.20	%		%