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Value-Stream Reporting with Inventory Decrease Rivera Manufacturing, Inc., has implemented lean manufacturing in its Kansas City plant as a pilot program. One of its
Value-Stream Reporting with Inventory Decrease Rivera Manufacturing, Inc., has implemented lean manufacturing in its Kansas City plant as a pilot program. One of its value streams produces a family of small electric tools. The value-stream team managers were quite excited about the results, as some of their efforts to eliminate waste were proving to be effective. During the most recent three weeks, the following data pertaining to the electric tool value stream were collected: Week 1: Demand 110 units $55 Beginning inventory 5 units $20 ($5 materials and $15 conversion) Week 2: Production 110 units using $400 of materials and $1,350 of conversion cost Demand 120 units $55 Beginning inventory= 5 units $20 ($5 materials and $15 conversion) Week 3: Production 110 units using $400 of materials and $1,350 of conversion cost Demand 110 units $55 Beginning inventory= 0 Production 120 units using $550 of materials and $1,700 of conversion cost
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