Heirloom Company manufactures hand-made pine storage boxes for a variety of clie

Question

Heirloom Company manufactures hand-made pine storage boxes for a variety of clients. As production manager, you have developed the following value chart:

Operation Average number of days

Receiving materials 1
Storing materials 2
Handling materials 3
Cutting/measuring materials 6
Assembling materials 4
Building boxes 7
Attaching hinges 2
Inspection 1

a) Determine the value-added activities and their total time
b) Determine the non-value-added activities and their total time
c) Calculate the manufacturing efficiency. (MCE)

Explanation / Answer

a.Value added activities and their total time 1.Cutting /measuring materials  =6 2. Assembling materials            =4 3. Building boxes                      =7 4. Attaching hinges                     =2 5.inspection                              =1 Total time                                =20    b.Non value added activities Receiving materials                  =1 Storing materials                      =2 Handling materials                    =3 Total                                          6 total manufacturing time=20+6=26 c.Manufacturing efficiency= Total manufacturing time/Value added time Manufacturing efficiency=26/20*100=130%                        

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