Problem 11-18 Nelson Extruding produces containers for nurseries and landscaping

Question

Problem 11-18 Nelson Extruding produces containers for nurseries and landscaping businesses. The company competes based on its low-cost, high quality products. As the company's expenses have risen, management has become concerned with the need to streamline various processes in order to reduce costs without reducing quality. The following table shows the time needed to produce a batch of 1-inch plant flats: Time to Complete 29 minutes 32 minutes 4 minutes 11 minutes 46 minutes 6 minutes 6 minutes Activity Materials moved to production floor Production in station 1 Materials moved to station 2 Wait to begin at station 2 Production in station 2 Inspection Materials moved to finished goods inventory

Explanation / Answer

Answer

(a)

Manufacturing cycle time = Process time + Inspection time + Move time + Queue time

                                           = 32 minutes + 46 minutes + 6 minutes + 4 minutes + 11 minutes

                                           = 99 minutes

(b)

Value-added time = Process time = Production in station 1 + Production in station 2

                                  = 32 minutes + 46 minutes

= 78 minutes.

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