Question

Oakwood Company produces maple bookcases. The following information is available for the production of a recent order of 500 bookcases.

Process time	6.0 days	Move time	3.2 days
Inspection time	0.8 days	Wait time	5.0 days

1. Compute the company’s manufacturing cycle time.

2. Compute the company’s manufacturing cycle efficiency. Interpret your answer.

3. Management believes it can reduce move time by 1.2 days and wait time by 2.8 days by adopting lean manufacturing techniques. Compute the company’s manufacturing cycle efficiency assuming the company’s predictions are correct.

Short answer

1. Cycle time:15 days
2. Cycle efficiency:0.40
3. Cycle efficiency after reduction in time:0.545

Step-by-step solution

Definition of Manufacturing Cycle Efficiency

The financial metric reflects the portion of cycle time spent by the business entity in its value-adding activities is known as manufacturing cycle efficiency.

Manufacturing cycle time

Particular	Time
Process time	6.0
Inspection time	0.8
Move time	3.2
Wait time	5.0
Cycle time	15 days

Manufacturing cycle efficiency

$$\begin{gathered} \text{Manufacturingefficiency}=\frac{\text{Procestime}}{\text{Cycletime}} \\ =\frac{6}{15} \\ =0.40 \end{gathered}$$

Manufacturing cycle efficiency after reduction in move and wait time.

Particular	Time
Process time	6.0
Inspection time	0.8
Move time	3.2
Wait time	5.0
Less: reduction in wait and move time	(4)
Cycle time	11 days

$$\begin{gathered} \text{Manufacturingefficiency}=\frac{\text{Procestime}}{\text{Cycletime}} \\ =\frac{6}{11} \\ =0.5454 \end{gathered}$$