Question 1

One way to increase capacity is to reduce the time it takes for setups and processing.

Accepted Answer

By reducing setup and processing times, the machines can produce more products in a given amount of time, thus increasing capacity.

Question 2

Brown Laundry has a variable demand.The daily demand ranges from 100 to 140 customers a day with an average of 5 items.The average daily demand is 110 customers.The laundry operates 10 hours a day.Each order takes approximately 5 minutes.
Required:
a.What is the average customer waiting time,in minutes?
b.What is the cycle time for an order?
c.The manager has decided that the waiting time is too long and has increased the workday to 11 hours.What is the waiting time now? Will the customers be any happier?

Accepted Answer

The answer of Brown Laundry has a variable demand.The daily...

Question 3

The manufacturing cycle including related delays can be reduced by ________.

Accepted Answer

Batching similar jobs together for processing can help to reduce the time spent on setting up equipment and switching between different types of production, which can speed up the manufacturing cycle. Decreasing the capacity of a bottleneck resource can actually slow down the manufacturing process overall, as it may cause delays and backups in other parts of the production line. Not setting up flexible manufacturing systems can also limit efficiency and slow down the cycle. Increasing the time for setups and processing would also slow down the cycle, so it is not a good choice. Therefore, the best choice is A, batching similar jobs together for processing.

Question 4

Longer manufacturing cycle times increase the inventory carrying costs and decrease revenues.

Accepted Answer

Longer manufacturing cycle times means the products are taking longer to be produced and therefore will take longer to be sold. This results in an increase in inventory carrying costs as the products are sitting in inventory for longer period of time. Additionally, decreased revenues can occur because there is less stock available for customers to purchase during the longer production cycle.

Question 5

Which of the following is a storage cost?

Accepted Answer

Deterioration is a storage cost as it refers to the loss in value or quality of inventory due to extended storage periods. Labor cost, direct material, and overhead cost are not directly related to storage costs.

Question 6

Answer the following questions using the information below:
Speedy Dress Manufacturing has two workstations, cutting and finishing. The cutting station is limited by the speed of operating the cutting machine. Finishing is limited by the speed of the workers. Finishing normally waits for work from cutting. Each department works an eight-hour day. If cutting begins work two hours earlier than finishing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but also it increases finished units produced each day by 160 units. All units produced can be sold even though the change increases inventory stock by 20% from 400 units. The cost of operating the cutting department two more hours each day is $1,600. The contribution margin of the finished products is $6 each. Inventory carrying costs are $0.40 per unit per day.
-What is the total production per day if the change is made?

Accepted Answer

The answer of Answer the following questions using the information...

Question 7

Answer the following questions using the information below:
Captain Carl's Seascapes produces sea pictures for sale through catalogs. The company has two workstations, photo production and framing. The photo production station is limited by the speed of operating the photo development machine. Framing is limited by the speed of the employees. Framing normally waits for work from photo production. Each department works an eight-hour day. If Captain Carl's Seascapes adds an earlier half shift so that photo production begins work four hours earlier than framing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but it also increases finished units produced each day by 200 units. All units produced can be sold. The cost of operating the photo production department four more hours each day is $1,250. The contribution margin of the finished products is $10 each.
-What is the change in the daily contribution margin if the change is made?

Accepted Answer

The answer of Answer the following questions using the information...

Question 8

Manufacturing Cycle Efficiency (MCE)= Value-added Manufacturing Time divided by Manufacturing Cycle Time.

Accepted Answer

This is the correct formula for calculating Manufacturing Cycle Efficiency (MCE).

Question 9

Manufacturing cycle times affect both revenues and costs.

Accepted Answer

Manufacturing cycle times directly impact both revenue and costs. Longer cycle times can lead to lost sales and decreased revenue, while also increasing costs associated with production, storage, and transportation. On the other hand, shorter cycle times can increase revenue and decrease production costs.

Question 10

Norton's Convenience store has a variable demand.The daily demand ranges from 270 to 330 customers a day who average purchasing 5 items each.The average daily demand is 300 customers.The convenience store currently operates 12 hours a day.Each order takes approximately 2 minutes.
Required:
a.What is the average customer waiting time,in minutes?
b.What is the cycle time for an order?
c.Norton has decided that the waiting time is too long and has increased the hours the store is open to 15 hours.What is the waiting time now?

Accepted Answer

The answer of Norton's Convenience store has a variable demand.The...

Question 11

When manufacturing cycle increases,________.

Accepted Answer

When manufacturing cycle increases, inventory carrying costs will increase because holding onto inventory for longer periods of time requires additional space, handling, and insurance expenses. Sunk costs are a fixed cost and do not change with an increase in manufacturing cycle. Opportunity costs may increase if the company is missing out on potential sales due to longer production times, but this is not a guaranteed outcome.

Question 12

Which of the following reduces manufacturing cycle times and delays?

Accepted Answer

Increasing the capacity of a bottleneck resource would increase the efficiency of the manufacturing process and reduce cycle times and delays. Selling an existing equipment or increasing the time for setups and processing would not have a significant impact on reducing cycle times and delays. Outsourcing to a third party may or may not reduce manufacturing cycle times and delays, depending on the reliability and efficiency of the third-party supplier.

Question 13

Identifying and minimizing the sources of non-value-added manufacturing time increases a firm's responsiveness to its customers and reduces its costs.

Accepted Answer

Identifying and eliminating non-value-added manufacturing time helps firms become more efficient, flexible, and responsive to customers while lowering costs. It can help improve product quality, reduce lead times, and increase productivity.

Question 14

Investing in a new equipment,such as flexible manufacturing systems that can be programmed to switch quickly from producing one product to producing another can decrease capacity as it would incur excess overhead costs.

Accepted Answer

Investing in a new equipment such as flexible manufacturing systems can actually increase capacity and efficiency in the long run. While there may be initial overhead costs, the ability to quickly switch between products can ultimately lead to increased production and profitability.

Question 15

Acme Janitor Service has always taken pride in the fact that it had one of the highest customer response times in the home cleaning service industry.However,as the products manufactured for this industry have become more complex,the company's customer response time has declined.
Required:
Why do you think that response time declined if all other quality factors have remained the same?

Accepted Answer

The answer of Acme Janitor Service has always taken pride...

Question 16

Longer manufacturing cycle times results in ________.

Accepted Answer

Longer manufacturing cycle times mean that products remain in inventory for a longer period, resulting in higher inventory carrying costs. Additionally, delayed delivery of products to customers can lead to lower revenues due to cancelled orders or dissatisfaction. This can further result in reduced profitability due to discounts offered to customers or higher costs incurred to expedite production to meet customer demand. Therefore, longer manufacturing cycle times generally result in lower revenues and higher inventory carrying costs.

Question 17

Answer the following questions using the information below:
Speedy Dress Manufacturing has two workstations, cutting and finishing. The cutting station is limited by the speed of operating the cutting machine. Finishing is limited by the speed of the workers. Finishing normally waits for work from cutting. Each department works an eight-hour day. If cutting begins work two hours earlier than finishing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but also it increases finished units produced each day by 160 units. All units produced can be sold even though the change increases inventory stock by 20% from 400 units. The cost of operating the cutting department two more hours each day is $1,600. The contribution margin of the finished products is $6 each. Inventory carrying costs are $0.40 per unit per day.
-What is the change in the daily contribution margin if the change is made?

Accepted Answer

The answer of Answer the following questions using the information...

Question 18

Answer the following questions using the information below:
Captain Carl's Seascapes produces sea pictures for sale through catalogs. The company has two workstations, photo production and framing. The photo production station is limited by the speed of operating the photo development machine. Framing is limited by the speed of the employees. Framing normally waits for work from photo production. Each department works an eight-hour day. If Captain Carl's Seascapes adds an earlier half shift so that photo production begins work four hours earlier than framing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but it also increases finished units produced each day by 200 units. All units produced can be sold. The cost of operating the photo production department four more hours each day is $1,250. The contribution margin of the finished products is $10 each.
-What is the total production per day if the change is made?

Accepted Answer

The change increases production by 200 units. Since the contribution margin is $10 per unit, the additional revenue is $2,000 (200 units x $10). The cost of operating the extra hours is $1,250, resulting in a net gain of $750. Therefore, the total production per day becomes 600 units (400 original units + 200 additional units).

Question 19

Increasing the capacity of a bottleneck resource increases manufacturing cycle times and delays.

Accepted Answer

Increasing the capacity of a bottleneck resource can actually decrease manufacturing cycle times and reduce delays. This is because the bottleneck resource is no longer overburdened and can complete its tasks more efficiently, allowing for a smoother flow of production.

Question 20

Inventory carrying costs equal the ________.

Accepted Answer

Inventory carrying costs include both the opportunity costs of the investment tied up in inventory (such as the potential return on investment if the funds were invested elsewhere) as well as the relevant costs of storage (such as rent, utilities, insurance, and security).

Quiz 19: Balanced Scorecard: Quality and Time

One way to increase capacity is to reduce the time it takes for setups and processing.

The manufacturing cycle including related delays can be reduced by ________.

Longer manufacturing cycle times increase the inventory carrying costs and decrease revenues.

Which of the following is a storage cost?

Manufacturing Cycle Efficiency (MCE)= Value-added Manufacturing Time divided by Manufacturing Cycle Time.

Manufacturing cycle times affect both revenues and costs.

When manufacturing cycle increases,________.

Which of the following reduces manufacturing cycle times and delays?

Identifying and minimizing the sources of non-value-added manufacturing time increases a firm's responsiveness to its customers and reduces its costs.

Investing in a new equipment,such as flexible manufacturing systems that can be programmed to switch quickly from producing one product to producing another can decrease capacity as it would incur excess overhead costs.

Longer manufacturing cycle times results in ________.

Increasing the capacity of a bottleneck resource increases manufacturing cycle times and delays.

Inventory carrying costs equal the ________.